Is the Movement for a Higher Minimum Wage Coming to Health Care?

Fast-food workers have been demonstrating for a higher minimum wage and recently, various corporations have increased the wages of their lowest-paid workers.  Has the movement come to the health care industry?

On May 22, 2015, the country’s largest Roman Catholic health system, St. Louis-based Ascension Health, announced that it would pay workers at least $11 an hour (compared to the federal minimum wage of $7.25 an hour), effective with the pay period beginning July 5, 2015.[1]  The new Socially Just Minimum Wage policy will affect about 10,500 people (7% of Ascension’s workforce of 150,000) in more than 1900 sites in 23 states and the District of Columbia.  The news release describes the job categories of affected workers at Ascension facilities and affiliated vendors: “aides and assistants; those who work in laundry, environmental, housekeeping, and food and nutrition services; receptionists and administrative assistants; admitting staff; and others.”

In April, nursing home workers demonstrating in Scranton, Pennsylvania for a living wage of $15 per hour[2] cited a recent report by the Pennsylvania-based Keystone Research Center, which found that that the median wage for a full-time nursing assistant in Pennsylvania ($13.01 per hour, $27,061 per year) is insufficient and below a living wage; that workers rely on means-tested public benefits to survive; and that means-tested benefits represent an additional subsidy to the nursing home industry.[3]    

A 2015 worker survey by the Service Employees International Union in Pennsylvania found 14% of aides “or someone in their household receives public assistance” and 28% of dietary workers “or someone in their household receives public assistance.”[4]  Information released by the Department of Public Welfare (now Human Services) suggested that about 5000 nursing home workers depend on Medical Assistance.[5] 

The Keystone report suggests that raising workers’ salaries to $15 per hour would create 1500 new jobs and generate $31 to $34 million in state and local tax revenue.[6]  It explains that raising the minimum wage is “affordable” (adding 2% to total costs)[7] and would reduce turnover, which is estimated to cost $3500 per person.[8]   Reducing annual turnover from 66% to 33% would save $1167 per worker, “almost enough to increase pay for nursing assistants by 60 cents per hour.”[9] 

The report suggests that some of the money to pay for raises for low-income workers could come from executive compensation, pointing out that in a recent seven-year period, the CEO of HCR ManorCare earned $129 million.[10]  As the report’s author asked in the press release announcing the report, “‘For an industry that derives most of its revenue from public sources, why is it acceptable for CEO salaries to be more than 600 times the average nursing assistant’s salary?’”[11]

T. Edelman – June, 2015