Direct care workers are paid low and non-competitive wages, with median hourly wages of $16.72, which is lower than the median wage for all other occupations with similar or lower entry-level requirements in all 50 states plus D.C. Nearly half of direct care workers are enrolled in one or more public benefit programs such as Medicaid. While raising direct care worker wages is crucial to recruiting and retaining a sufficient workforce to handle growing demand in long-term care, incremental wage increases run the risk of pushing direct care workers over “benefits cliffs” that reduce their net resources. Benefits cliffs occur when an increase in income causes a worker to make too much to qualify for public benefits programs, but not enough to overcome the loss of those public benefits. As a result, the worker and their family end up being worse off financially than they were before their earnings increased. Using the American Community Survey 5-Year estimates data from 2018-2022, this study will quantify the number and proportions of direct care workers who are currently navigating benefits cliffs and describe the demographic and geographic factors associated with the greatest risk.
Key Questions
- How many direct care workers are currently at or near benefits cliffs?
- What is the demographic and geographic composition of direct care workers navigating benefits cliffs?
- At what level will direct care workers’ earnings transcend the risk of benefits cliffs?
For more information, contact Susan Chapman