Thursday, December 18, 2008

Prescription for a Healthier Economy

By Steven Edelstein

As policymakers debate how to stabilize the sagging economy, it’s time to think about how to help more than 3 million low-wage workers who hold the answer in their busy and burdened hands.

The recession is hitting hardest in low-income communities, and, if we’re serious about stimulating the economy, we need to make sure that recovery efforts reach the people and places that need it the most. In today’s aging society and service economy, at least one in 10 low-wage-earners is a direct care worker.

These hard-working, hard-pressed Americans provide healthcare and assistance services to older adults and people with disabilities in private homes, nursing homes, and day programs that provide non-residential, non-medical services. Their jobs -- home health aide, personal and home care aide and nursing aide, orderly and attendant -- include two of the three fastest-growing occupations in the nation.

Already, these jobs pump $56 billion into the economy, especially in low-income communities where stable employment and consumer spending are in short supply even in good times and are severely imperiled during a downturn. In addition, the availability of direct care for aging and ailing Americans is essential for an estimated 15.9 million workers who balance full-time employment with caregiving for a family member over age 18. American companies lose $33.6 billion a year because of the lost productivity of workers who are also caring for family members. Without a stable, well-prepared workforce of direct care providers, millions of workers would be unable to balance the demands of their jobs and their loved ones -- and businesses would lose billions more in lost productivity.

So, as economic policymakers seek solutions for the recession, why not take action to solve social and economic problems together: Let’s invest in recruiting, training, employing, retaining, and raising the wages for direct-care workers. The idea is doable, workable, and will reap returns for years to come.

At a time when policymakers are seeking to prime the economic pump, the federal government already has a pipeline to the direct-care workforce. More than 70 cents of every dollar for eldercare/disability services comes from federal funds, mostly Medicare and Medicaid.

Moreover, these workers need raises and will pump the money back into the economy. Because of their low wages and meager benefits, 40 percent of direct-care workers live in households that rely on one or more public benefits, such as Food Stamps and Medicaid. Devoting federal funds to increase their pay to $12-an-hour will reward their hard work and recharge the economy. With well-deserved and long-overdue pay increases, these workers will spend the money on the necessities of life for themselves and their children while stimulating economic activity in their needy neighborhoods and throughout the nation.

With higher wages and opportunities for education and training, direct care workers will stay longer and do better at their jobs. Currently, there is a 40 to 60 percent turnover rate among home care workers and at least 75 percent turnover among nursing home workers. With more experienced workers, the quality of service will improve, and working Americans with family responsibilities will have more confidence that their loved ones are being well-cared for, further boosting productivity and the economy.

Unlike some other anti-recession proposals, investing in direct-care workers is a long-term investment in stimulating the economy and strengthening the social fabric. In an aging society, more Americans will need direct-care. As a result, these jobs are expected to increase by 1 million from 2006 to 2016.

By making these occupations stable and rewarding jobs with promising futures, the nation will reap rewards in improved healthcare, enhanced productivity, increased incomes, and expanded opportunities in communities where the recession started earliest and will last longest. At a time when many economic remedies are little more than placebos, investing in direct-care workers is a prescription for a healthier economy -- and a healthier society.
Edelstein is the national policy director of PHI, a national nonprofit that works to improve the quality of eldercare/disability services by supporting quality jobs for the nursing assistants, home health aides, and personal care workers who provide that care.
Copyright (C) 2008 by the American Forum. 12/08