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Did Minimum Wage Policy Changes Impact Home Health Workforce?

Di Yan¹, Helena Temkin-Greener¹, Ronni Pavan²

¹University of Rochester School of Medicine and Dentistry, Rochester, NY, USA.

Home Health Care Management & Practice

|November 30, 2023

Summary

Raising minimum wage (MW) policies may improve home health aide (HHA) wages and employment. Studies show higher MWs and the Fair Labor Standards Act (FLSA) extension increased HHA hourly wages, particularly in less competitive markets.

Keywords:

Fair Labor Standards Act employment health workforce home health minimum wage wages

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Area of Science:

Health Economics
Labor Economics
Public Policy

Background:

The home health aide (HHA) workforce faces shortages exacerbated by low wages.
Minimum wage (MW) policies are potential interventions to address workforce shortages.

Purpose of the Study:

To examine the impact of MW policies on HHA wages and employment.
To assess the combined effects of state MW increases and the Fair Labor Standards Act (FLSA) extension.

Main Methods:

County-level longitudinal analysis using national data from 2012 to 2018.
Inclusion of 2,496 counties and all workers in the home health industry.
Analysis of consumer price index-adjusted state MW and FLSA extension variables.

Main Results:

HHAs in states with MWs above $10 saw a $1.00 increase in hourly wages compared to those below $8 (p = .011).
The FLSA extension correlated with a $1.15 wage increase in states with MWs above $10 (2014).
The FLSA extension positively impacted HHA employment in less-competitive labor markets.

Conclusions:

State MW increases, especially when combined with the FLSA extension, can improve HHA wages.
These policy changes may help stabilize and enhance the home health workforce.
Targeted MW policies show promise for addressing labor shortages in the home health sector.