Impending Labor Shortage in Home Care & Senior Living

The Impending Labor Shortage in Home Care and Senior Living Facilities

Senior & Caregiver - Labor Shortage in Home Care

In previous blog posts we’ve discussed the rapid increase in Baby Boomers requiring Nursing Home care in the next two decades. It’s well documented that 10,000 Baby Boomers have been celebrating their 65th birthday every day since 2011 and will continue to do so for the next 15 years. Since the average person requires care around age 80, the big bubble for care demand is still a few years off.


The need for Senior Care Facilities has been discussed in the past, but what about workers to fulfill the need for care within institutions and at home? The US Bureau of Labor Statistics (table below) predicts a large increase in demand for senior care related workers in the next 10 years. This table predicts that 348,400 more Home Health Aids will be needed in the next decade. This is an increase of over 38%.


According to Billy Weeks for The New York Times, in a February 26, 2014 article titled A Shortage of Caregivers, he writes; “Topping the list of occupations expected to grow between 2012 and 2022 are personal care aides, in the No. 1 slot (580,000 new positions); home health aides, No. 4 (424,200 jobs); and nursing assistants, No. 6 (312,200 jobs).” The three jobs together equals 1,300,000 additional workers necessary to meet demand in the next 10 years. This segment of the workforce will exceed 5,000,000 workers and become the largest occupation by passing retail sales.


This increase in worker demand is a challenge – these jobs tend to be low paying (Home Health Aides averaging $21,380/ year in 2012) with high rates of injury and often with no benefits. Where high demand usually equals an escalation in wages, these services are primarily paid for by Medicaid and Medicare, capping the amount available to pay the workers. Employers will be pinched by three factors; (1) pay cap made necessary by Medicaid and Medicare reimbursement, (2) current push to increase minimum wage to $15 / hour and (3) the shortage of people willing and capable of doing the job.


Some solutions put forward to supply the increasing demand are; making special immigration provisions to fill the void, paying relatives to provide care and recruiting retired healthcare workers to provide part-time care. It will be interesting to see how the labor market adjusts to this upcoming demand for care providers to the aging.


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