The Shifting Supply and Demand of Care Work: The Growing Role of People of Color and Immigrants
- ID: IWPR #C470
As the Baby Boom generation matures and current unmet child care needs remain constant, the United States faces a burgeoning crisis in the demand for care workers. The market has slowly but surely begun to adapt, seeing an overall growth of 19 percent in the number of care workers between 2005 and 2015, with most of that growth in adult care. The U.S. Department of Labor suggests that this will only grow further, projecting that the economy will add more than 1.6 million jobs in occupations related to adult care by 2024 (Rolen 2017).
This report analyzes changing demographics and trends in earnings for two occupational groups, child care and adult care workers. Findings from the analysis show that:
—-While Still Largely Female, White, and US-Born, the Care Workforce Is Increasingly Adding More Men, Women of Color, and Foreign Born
Although the care industry is dominated by women (88 percent), men represent a rapidly growing part of the workforce: between 2005 and 2015, the number of male care workers grew by 42 percent, compared with 17 percent for women. Further, while the care industry continues to employ mostly White, U.S.-born workers, these demographics are also changing, particularly in home-based adult care. While the care workforce grew among all major racial and ethnic groups, the share made up of White workers grew at the slowest rate (9 percent), with the share of Hispanic workers growing more than five times as much (48 percent), and the share of multiracial workers growing six times as much (57 percent).
The share of naturalized citizens and foreign-born non-citizens in the care workforce grew by 70 percent and 20 percent, respectively, over the decade between 2005 and 2015; home-based adult care, in particular, saw a 140 percent increase in the share of naturalized citizens and an 80 percent increase in the share of foreign-born non-citizens. In particular, the care industry saw the sharpest increase among non-white foreign-born workers (43 percent), especially in adult care (115 percent). More than half of all foreign-born care workers have lived in the United States for ten or more years, and 56 percent of naturalized citizens and 43 percent of non-citizen care workers speak English “very well” or better as of 2015.
—-Female Care Workers Are More Educated Than in 2005, Yet Face High Poverty Rates
In addition to increases in median worker age in the care industry, educational attainment is simultaneously growing, particularly for women. In 2005, care workers were most likely to have a high school diploma or GED; in 2015, care workers are most likely to have an Associate’s degree or some college education. Nearly two in five home child care workers (39 percent) had some college or an Associate’s degree in 2015, a 35 percent increase from the decade before. During the same time period, the number of female home adult care workers with some college education or an Associate’s rose by one-third, increasing 27 percent to 39 percent.
The increase in educational credentials has not helped female care workers escape poverty, however, as women in the care industry have universally higher poverty rates than their male counterparts, who generally have less educational attainment than their female colleagues. These findings indicate that education does not seem to help women leave poverty as much as it does men. Further, stagnant poverty levels are disconcerting given recent and projected future employment growth in the industry. If poverty rates among care workers do not dramatically decrease, it may prove more difficult to attract skilled labor to accommodate growing care demands.
—-Despite Gains in Human Capital and Growing Demand, Wages for Care Workers Are Stagnant or Declining
For many industries, greater education levels and an older workforce suggest a larger skillset and corresponding higher wages. Overall, care wages are stagnant or in many cases, declining. Between 2005 and 2015, male care workers saw wages decline by 16.5 percent, while women in the industry saw wages decline by 5.2 percent. Although men experienced sharper wage declines than women, they maintained higher wages, with women earning only 92 percent of men’s earnings in 2015 at the median for full-time, year-round work. When considered by race and ethnicity, Hispanic care workers have seen the largest wage growth, while Other/Mixed workers saw their wages drop by one-tenth overall. Non-citizens saw strong wage growth in comparison to U.S.-born and naturalized citizens in child care; yet, they have lower median incomes than all other demographic groups.
People of color, foreign-born workers, and older women are particularly affected by these wage losses despite higher levels of education and skill. Simultaneously, these groups comprise the most quickly expanding portions of the care labor force. Provided that the care industry is projected to grow most in home-based services and adult care, the subgroups particularly affected by these dynamics, policy intervention may be necessary to improve wages for the care workforce to meet demand for skilled workers.
Introduction: Changing Age Demographics in the United States
Effective care work, whether for children or for adults in need of assistance, combines informal work (generally unpaid and provided by families) and formal work carried out by those in paid care occupations. But despite this mixed character of care work, allocating it well through markets has posed many difficulties. In the absence of adequate public support, those who need care the most often face financial barriers to obtaining services through the paid care market. In turn, this inability to access paid care results in signals indicating that demand for it is low. Moreover, because care work is underpaid and undervalued, those who specialize in its provision (unpaid and paid) are more likely to experience inequalities along lines of gender, race, and class. The low wages and poor working conditions that are common features of these jobs may also have adverse consequences not only for care providers and care recipients, but for society as a whole. Understood against this context, the aging of the U.S. population, largely driven by the maturing of the large Baby Boom generation, is a cause for concern. Between 2005 and 2015, the number of Americans aged 60 and older increased by 40 percent (from 47.7 million to 67.0 million) and their share of the overall population is expected to continue to grow. As the number of older Americans grew, the proportions of them needing some assistance with their daily life also increased substantially, reaching nearly 22 million by 2015, up from 17 million ten years earlier (see Figure 1). Most of this growth is in the 60-74 age range, which had a 29 percent increase, versus a 24 percent increase for ages 75 and above. In comparison, there was a 2 percent decrease of individuals under the age of 60 who require help with activities of daily life. Overall, there are more than 42 million Americans living with one or more difficulties of daily life in 2015, about 11 percent more than in 2005. The growth of this population is expected to continue this trajectory: in 2012, 43 million Americans were above the age of 65, and in 2050, this number is expected to nearly double (Ortman, Velkoff, and Hogan 2014).
Figure 1. The Number of Adults with Some Difficulties of Daily Life by Age, 2005 and 2015 (Numbers in millions)
Many of the elderly are single, especially women, and the share of singles is also expected to grow, as Baby Boomers married less and divorced more than earlier generations. More will be living without partners who might be able to assist in their care; moreover, they will have fewer adult children who might be able to provide or coordinate care (Hartmann and English 2009). Surveys suggest that Baby Boomers prefer to remain in their homes as long as possible, a preference that is expected to increase the demand for home care services above and beyond the sheer growth in the older population. For example, an AARP survey found that 87 percent of adults aged 65 and older want to stay in their current home and community as they age, a trend we will later explore in data comparisons (Harrell et al. 2014).
In contrast, the numbers of children ages 0-17 in the United States plateaued from 2005 to 2015. Figure 2 shows that the number of children aged 0-4 decreased by nearly 3 percent between these years, followed by ages 13-17 dropping by 1 percent. However, the cohort of those aged 4-12 increased by 3 percent. Despite birth rates declining for some age cohorts or remaining stable for others, there is an unmet need for child care in America, just as there is for adult care. The U.S. Census Bureau finds that when adjusted for inflation, the average weekly cost of child care increased from $84 in 1985 to $143 in 2011 (U.S. Census Bureau 2013). Child Care Aware calculated that the mean yearly cost of center-based child care in 2015 was higher than one year of college tuition and fees in thirty states and the District of Columbia (Child Care Aware of America 2016). Further, quality remains a concern: more than four out of five child care centers merely meet “fair” quality standards, and less than 10 percent of all child care arrangements are satisfactory to contribute to positive early childhood outcomes.
Figure 2. Number of Children by Age, 2005 and 2015 (Numbers in millions)
Projections suggest that plateaued fertility rates, combined with decreasing migration, and the aging Baby Boomer generation will contribute to the older population (65 years plus) growing as a share of the total population through 2030, after which it is expected to level off at a higher percentage than in earlier years (20 percent after 2030, compared with 12-13 percent between 1990 and 2010). The older old (85 plus) are also expected to increase as a share of the 65 plus age group, from 14 percent today to 21 percent in 2050 (Colby and Ortman 2017). Those who experience dual child and adult care needs—a dynamic that has grown more common as the Baby Boomers age—are members of what is known as the Sandwich Generation (Parker and Patten 2013).
1. Employment Changes in Care Work
In federal labor force data, care workers are included in three occupational categories—‘child care workers,’ ‘personal and home care aides,’ and ‘nursing, psychiatric, and home health aides;’ in this report, the second and third occupations caring for adults are combined, and labeled adult care in the analyses that follow and which show results for two occupational groups, child care workers and adult care workers. Care workers in these two occupational groups are also divided into subgroups according to their industry or work setting. For child care workers, those employed in ‘private households’ are considered home-based child care providers. For adult care workers, those who work in the industries of ‘home health care services’ or ‘individual and family services’ are considered home adult care workers. Others in each group are considered institutional or center-based care providers. The federal occupational group ‘pre-kindergarten and kindergarten teachers’ is excluded from our analyses as are registered nurses and other more highly educated professionals who sometimes work in clients’ homes as well as in institutional settings. Thus, this report looks at only a portion of the direct care workforce in occupations that tend to have lower educational requirements, although short-term on-the-job training is common (U.S. Department of Labor 2017).
As U.S. demographics change with an increasingly older population, the role of paid care work has become particularly important, representing a growing share of the labor force. In 2005, around 5.3 million worked in the care industry, including child and adult care based in institutions and the home. By 2015, this number increased to almost 6.3 million, a growth of 19 percent, as seen in Figure 1.1. Compared to total job growth rates, which remained less than 5 percent from 2005 and 2015, an 87 percent increase in the number of workers in home-based adult care and an 8 percent increase in center-based adult care workers seem even more substantial. Employment in adult care is projected to grow by 25 percent between 2014 and 2024 (compared with 6.5 percent for employment overall) with an additional 1.6 million jobs in elder care by 2024 (Bureau of Labor Statistics 2015; Rolen 2017). Employment in child care grew at about the same rate as jobs overall between 2005 and 2015 and this is projected to continue through 2024.
Figure 1.1. Growth of Care Industry by Worker by Gender and Occupation, 2005 and 2015
Employees in care industries are overwhelmingly female, despite a decrease in the female share from 90 percent in 2005 to 88 percent in 2015 (see Table 1.1 and Figure 1.1). Among the four subgroups of paid caregivers in this report, the highest female share is in home-based child care in 2015 (97 percent) and the lowest in center-based adult care in 2015 (85 percent). Since women also encompass the majority of the elderly population and are the primary family members who provide unpaid child care, both the supply and demand of care can be seen as highly gendered issues. Despite women dominating all four subgroups in care occupations, the rate of care employment growth is faster among men (42 percent increase overall, compared with 17 percent growth for women) (see Figure 1.1). In particular, we find that employment in adult care is growing faster for men than for women. For instance, men’s employment in home-based adult care increased by 179 percent from 2005 to 2015, which was the fastest growing occupation group among the four subgroups including both men and women. And men’s employment in center-based adult care grew by 24 percent, while women’s grew by only 6 percent. These numbers contrast sharply with male employment in the child care sector, which registered a 36 percent drop in males employed in home-based child care and only a 15 percent increase in center-based child care.
Table 1.1. Growth of Care Industry by Worker Gender and Occupation, 2005 and 2015
Increased Prevalence of Workers of Color and Foreign-born Workers
Within the past decade, workers in care occupations have also become more diverse, with most growth among Hispanic and Other/Mixed workers, as shown in Table 1.2. The number of all racial and ethnic groups in the care industry increased by 19 percent from 2005 and 2015. Among racial and ethnic groups, Hispanic and Other/Mixed increased by 48 percent and 57 percent, respectively, while the number of White workers increased only by 9 percent during that period. Again, the fastest growth in employment by any race and ethnic group is in home-based adult care. Regarding the types of occupations, the number of employees in home-based adult care irrespective of race and ethnicity increased the most between 2005 and 2015: 73 percent for White, 87 percent for Black, 103 percent for Hispanic, and 135 percent for Other/Mixed group. For adult care center workers, Black employment grew by 2 percent and Whites saw no growth; by contrast, Hispanics saw a 49 percent increase, and Other/Mixed grew by 40 percent. Those in home child care saw less dramatic shifts, although increases were highest among Other/Mixed (36 percent) and Hispanics (32 percent), followed by a 23 percent increase in White employment and 13 percent increase for Blacks. In 2005, 54 percent of caregivers were White, non-Hispanics; in 2015, this dropped to half of all care workers, and was accompanied by universal increases for minorities. In this decade, Other/Mixed workers saw a 57 percent increase in their numbers, followed by a 48 percent increase of Hispanics. Despite their rapid growth, Hispanics comprise around 17 percent of all care workers followed by Other/Mixed at 8 percent in 2015.
Table 1.2. Number of Care Workers by Race/Ethnicity, 2005 and 2015
While the total number of White employees is higher than other racial and ethnic counterparts as shown in Table 1.2, the distribution of racial the ethnic groups from 2005 to 2010 has undergone change. Figure 1.2 presents the distribution of all care workers by race and ethnicity, broken down further into types of care occupations, between 2005 and 2015. For child care (home-based and center-based), White workers accounted for about half of employment in 2005 and 2015. Yet, in adult care, Whites made up less than half the workforce in 2015 (43 percent for home-based adult care and 48 percent for center-based adult care). Although Blacks experienced the most modest increase of all minorities during this time frame (16 percent) as seen in Table 1.2, they continue to make up a large portion of the care industry, as nearly one in four care workers was Black in 2015.
Figure 1.2. Distribution of Care Workers by Race/Ethnicity, 2005 and 2015
Table 1.3. Number of Care Workers by Citizenship Status, 2005 and 2015
Each immigrant/native status category from 2005-2015 saw its highest employment growth under the home adult care subgroup. Here, the share of naturalized citizens increased by 140 percent, whereas non-citizen and U.S.-born employment grew by 85 and 80 percent, respectively. Center-based adult care continued to grow as well, albeit more gradually: naturalized citizen employment increased by 56 percent, those born in the United States by 4 percent, and non-citizens by 2 percent. The subgroup with the least growth within each category is center-based child care, showing a decrease of U.S.-born workers, no change for non-citizens, and a 25 percent increase for naturalized citizens. However, home-based care for children grew more with 86 percent growth for naturalized citizens, a 23 percent increase for the U.S.-born, and a 10 percent rise for non-citizens. Overall, these data show that while the groups of care occupations studied here continue to employ mostly White, U.S.-born workers, these demographics are changing as the minority and naturalized populations employed in them grow.
Figure 1.3. Growth in Care Workforce by Immigrant/Native Status, 2005 and 2015
Table 1.4 shows the number of care workers from 2005-2015 by White and non-White and immigrant/native status (US-born vs. foreign-born). Overall, center-based child care employment grew the least in this decade; the largest growth was exhibited among White foreign-born workers at 16 percent, failing to match the 19 percent industry growth. Conversely, home-based adult care workers grew the most, as particularly seen in non-White foreign-born workers, where representation increased by more than two times. This race/ethnicity subgroup had the highest employment increases, with an overall growth of 43 percent, most of which was concentrated within adult care (31 percent rise in center-based employment). Home child care employment for non-White foreign-born workers grew by 27 percent, countered by center child care growth by 9 percent. In comparison, U.S.-born workers had the most modest employment rises with an overall growth of 8 percent. Center-based care for this group universally decreased—adult care by 1 percent, and child care by 11 percent—while home care grew, with child care by 22 percent and adult care by 72 percent. This pattern of home care growth also held for non-White, U.S.-born workers and White foreign-born workers. For instance, home-based adult care grew by 90 percent and 85 percent, respectively, followed by home child care at 30 percent and 40 percent. On the other hand, center-based adult care grew by 11 percent and 15 percent for non-White U.S.-born workers and White foreign-born workers, respectively, followed by center-based child care with a 5 percent rise in non-White U.S.-born employment and 16 percent rise for White foreign-born employment. This data shows that along with minorities, those born outside of the U.S. comprise a rapidly growing portion of the care industry, with a particular concentration in all home-based care.
Table 1.4. Number of Care Workers by Race/Ethnicity and Immigrant/Native Status, 2005 and 2015
Characteristics of Foreign-Born Care Workers
The majority of foreign-born care workers who are naturalized citizens reported having lived in the United States for at least ten years in both the 2005 and 2015 American Community Surveys (Table 1.5). Specifically, 84 percent of adult care center workers stated this in 2005, along with 90 percent of center-based child care workers in 2005 and in 2015. The percentage of non-citizen foreign-born care workers who reported having lived in the country for at least a decade was lower than for naturalized citizen foreign-born care workers (47 percent versus 86 percent), although the former substantially increased between 2005 and 2015 to 58 percent, with the latter increasing by one percentage point. According to the surveys, the proportion of home-based child care workers who were not citizens and who reported living in the United States for at least ten years increased to 54 percent, from 35 percent in 2005. Similarly, the percentage of non-citizen child care center workers who reported that they had lived in the country for ten years or more rose over the same period by about 35 percent. The proportion of foreign-born adult care workers who were not citizens and also reported having lived in U.S. for at least ten years followed the same trends: adult care homeworkers increased from 51 percent to 55 percent, and the percentage for adult care center workers rose from 47 percent to 57 percent. In sum, more than half of all foreign-born care workers have lived in the United States for ten years or more as of 2015, with significant growth occurring in the past decade.
Table 1.5. Length of Tenure in U.S. and English Fluency in Care Workers, 2005 and 2015 for Foreign-Born Workers
More than half of all naturalized citizen care workers reported speaking English “very well” or better in both 2005 and in 2015, while closer to 40 percent of all care workers who were not citizens reported the same. Among naturalized citizen care workers, the proportion who speak English proficiently was highest for center-based adult care workers (63 percent in both 2005 and 2015) and lowest for home-based adult care workers (48 percent in 2005 and 47 percent in 2015), while the proportion for child care workers ranged from 53 percent for center-based child care workers in 2005 to 59 percent for home-based child care workers in 2015. However, the prevalence of English proficiency among non-citizen care workers was comparatively lower, especially among child care workers. In 2005, 30 percent and 39 percent of non-citizen center- and home-based child care workers, respectively, reported speaking English “very well” or better. In 2015, this increased to 33 percent and 53 percent, respectively, meaning that there was about a 36 percent increase in the proportion of home-based child care workers with a high level of English proficiency between 2005 and 2015. Among adult care workers who were not citizens, over half who work at centers reported speaking English “very well” or better in 2005 and 2015, although the proportion for home-based adult care workers decreased from 41 percent in 2005 to 35 percent in 2015.
2. While Care Workers Are Older and More Educated, Their Family Poverty Rates Remain High
The care industry workforce is aging, especially women workers. One half of all female care workers were made up by those aged 39 and younger in 2005, but this proportion decreased to less than 50 percent by 2015 (see Figure 2.1). The share of male younger cohorts (39 and younger) in care industry also dropped by 1.2 percentage points from 2005 to 2015. Among home-based child care workers, 60 percent of females and 84 percent of males were under the age of 25 in 2005, making this the youngest care occupation. In 2015, these numbers decreased to slightly above half for females and three-quarters for males. The age cohort of 25-39 represented the biggest percent increases in the home-based child care workforce, growing by 9 percentage points for men and 6 for women. For female center-based child care workers, 32 percent were between the ages of 25-39 in 2005, which decreased to 28 percent in 2015; correspondingly, the largest share of male center-based child care workers were under the age of 25 in 2005 (48 percent), which decreased by one percentage point in 2015. The age distribution of center-based adult care workers remained relatively stable, predominantly composed of both women and men ages 25-39 (32 percent of women in 2005 and 2015, and 35 percent of men in 2005 and 34 percent in 2015 belonged to this age group). However, the data also show that the female home-based adult care workforce is aging while the portion of men below 25 in the same subgroup grows. In 2005, 37 percent of female home-based adult care workers were between the ages 40-54, which decreased to 33 percent in 2015. Most of the female home-based adult care growth comes from the older cohort (aged 55 and older): 27 percent in 2005 and 32 percent in 2015. For men in the same subgroup, 37 percent in 2005 were ages 25-39, but this decreased to 26 percent in 2015. Balancing out this loss, home adult care employment among males aged 25-39 rose 9 percentage points in this decade, representing one-third of this workforce subgroup.
Figure 2.1. Share of Care Workers by Age and Gender, 2005 and 2015
As highly educated women have gained new opportunities in paid employment, the educational attainment of female care workers also increased from 2005 and 2010 (see Figure 2.2). In general, about 40 percent of female care workers had some college degrees or more in 2005, a significantly lower percentage than those in 2015 (51 percent). Likewise, male care worker were likely to have more education in 2015 compared to 2005 (58 percent vs. 49 percent for some college and above). In 2015, both women and men in every subgroup were less likely to have less than high school diplomas and more likely to have some college or more. In particular, the share of women with less than high school diplomas was 34 percent in 2005, but only 20 percent in 2015. For some men, the change was even more dramatic: in home-based child care, the percentage of men with less than high school diplomas decreased from 53 percent in 2005 to 20 percent in 2015. The pattern is similar to adult care workers. One in three home-based female adult care workers had less than high school diplomas in 2005 but only one in five in 2015. Both female and male center-based care workers are more likely to be better educated: less than half of center-based child care workers had high school diplomas or GED in 2005, but more than half had attained them in 2015.
Figure 2.2. Share of Care Workers by Educational Attainment and Gender, 2005 and 2015
Despite the trend towards higher education levels and skills in the care work industry, the share of care workers who are poor or near poor has remained relatively unchanged. Yet, the differences in poverty rates between workers in child care and adult care are noteworthy. In general, child care workers were less likely to be in poverty compared to adult care workers, even though the margin seems narrow (see Figure 2.3). The percentage of women in center-based adult care with incomes above 200 percent of the Federal Poverty Level (FPL) remained consistent between 2005 and 2015; however, there was a slight shift as some in the poverty category (< 100 percent FPL) moved into the near poor category (100-199 percent FPL), which increased from 28 percent to 29 percent. Similarly, men in the same subgroup saw a 1 percentage point increase of those living above 200 percent FPL—64 percent in 2005 versus 65 percent in 2015. Female child care center workers saw similar dynamics, with a 1 percentage point increase in those living “not poor” (58 percent to 59 percent), and male workers in the same subgroup saw a slight drop in poverty incidence. From 2005-2015, there was a 15 percent decrease of male child care center workers with poverty level incomes, followed by a 13 percent drop of those with near poor incomes. Home-based care shows similar dynamics. Female home child care workers saw a slight increase in the share of those not poor, from 57 to 59 percent. Men in the same subgroup had an increase in poverty, from 15 percent in 2005 to 20 percent in 2015. Female home adult care workers had a growth of one percentage point in those living above 200 percent FPL, with 45 percent in 2015. For men in the same subgroup, those living in not poor circumstances grew from 47 percent to 52 percent, a 10 percent increase.
It is noteworthy that men have lower rates of poverty than women within the same subgroups of child care and adult care workers, despite having lower educational attainment—precisely the same subgroup that had a substantial increase (12.4 percentage points) of not poor family incomes for men. Therefore, while it appears that with more educational attainment men in some care fields saw income gains, the same is not shown to be true for women: their poverty status changed little between 2005 and 2015 despite much higher educational attainment. Further, generally stable poverty levels are disconcerting when one considers how care employment has grown in the past decade, and large projections for future employment growth. If poverty incidence among care workers does not dramatically decrease, it may prove more difficult to attract skilled labor to accommodate the growing adult care demand and consistently strong child care demand anticipated.
Figure 2.3. Share of Care Workers by Family Poverty Status and Gender, 2005 and 2015
3. Earnings for Care Workers Are Low and Failed to Grow
As Figure 1.1 shows, care occupations remain dominated by women. Although women generally have higher education levels and are older than their male counterparts—characteristics that would suggest a larger skillset and more desirability—there was a female/male pay ratio of 83 percent in 2005 and a gender wage gap of 17 percent (Figure 3.1). By 2015, the ratio increased to 92 percent and the gender wage gap fell to 8 percent, as illustrated in Figure 3.1. A closer gender gap did not occur because of an increase in female earnings over time. Rather, men’s faster drops in wages in all four subgroups compared to women’s accounted for a narrower gender gap in 2015 (see Figure 3.2). The only subgroups that experienced wage growths in full-time, year-round employment from 2005 to 2015 were female child care occupations. Home-based child care workers had a 10 percent median pay increase, and those in centers increased by 6 percent, to a median of $20,000 per year. However, men’s average pay was still higher than women’s in center-based child care at $23,000 annually, which was down from nearly $28,000 the decade before, almost an 18 percent wage decrease. While median wages in adult care workers dropped for both women and men, the drop was larger among male workers. For instance, women in home-based adult care had a 1 percent wage decrease and a 2015 median income of $22,000, versus a 7 percent drop for their male counterparts, who nevertheless earned more than women in 2015 (median of $23,800). Women in center-based care had a 5 percent wage decrease, whereas men dropped by 7 percent, with a median annual earnings in 2015 of $24,600 and $27,000, respectively. Thus, although male earnings have exhibited a more dramatic downward trajectory in these care work subgroups, men maintain universally higher wages than their female counterparts. Yet, it is important to note that the highest 2015 figure—$27,000 for male center-based adult care workers—is only slightly above 200 percent of the FPL for an individual ($23,540) (U.S. Department of Health & Human Services 2015).
Figure 3.1. Female-to-Male Median Wage Ratio of Full-Time, Year-Round Care Workers, 2005 and 2015 (in 2015 Dollars)
Figure 3.2. Median Annual Earnings of Full-time, Year-round Care Workers by Type of Care Work and Gender in 2005 and 2015 (in 2015 Dollars)
Figure 3.3 shows the earnings of full-time year-round care workers by race and ethnicity. The most significant wage growth from 2005-2015 is among Hispanic child care employees, at 16 percent for home-based care (median of $24,100 in 2015), and 15 percent for center-based workers, or $19,600, the lowest of all median annual earnings. Whites saw modestly rising wages in home-based child care (10 percent) and center-based child care (6 percent). The only positive wage growth for Blacks was at 4 percent in child care centers, resulting in a median income of $22,000. All adult care subgroups had negative or no wage growth; particularly affected are Other/Mixed workers, with a 14 percent wage decrease in centers and 9 percent drop in home-based care, although the former had the highest median income of all care workers in 2015 at $26,000. This is in comparison to a 6 percent and 5 percent wage decrease for Hispanics and Whites in home-based care, respectively, followed by a 6 percent drop for Blacks, a 2 percent earnings reduction for Whites, and a 1 percent decrease for Hispanic center-based care workers.
Figure 3.3. Growth in Earnings of Care Workers by Race/Ethnicity, 2005 and 2015
When considered by citizenship status, non-citizens have the most dramatic wage swings (see Table 3.1). Although they have the highest wage growth as exhibited in all child care professions, they also experienced the biggest drops, as can be seen in adult care with a 14 percent decrease for center-based workers and a 7 percent drop for home-based employees. Further, they have the lowest earnings within their respective subgroups with the exception of center-based adult care, where they share a median wage with those born in the United States ($24,000). Despite 21 percent earnings growth for non-citizens in home-based child care, this amounts to a median wage of $22,000, $2,000 less than their U.S.-born counterparts who had a 10 percent wage increase. Further, a 14 percent increase in child care center wages for non-citizens amounts to $18,000 in 2015, the lowest of all earnings in Table 3.1. Those born in the United States experienced a 1 percent wage decrease for home-based adult care work, a 6 percent drop for center-based adult care work, and a 3 percent increase for child care center-based work on median from 2005 to 2015. Naturalized citizens, on the other hand, have the highest earnings, with a 2 percent median increase for center-based child care amounting to $21,000, and a drop of 1 percent for home adult care and 3 percent for center-based adult care at $24,000 and $30,000, respectively.
Table 3.1. Median Annual Earnings of Full-time, Year-round Care Workers by Type of Care Work and Citizenship Status, 2005 and 2015 (in 2015 Dollars)
Table 3.2 explores median annual earnings for care workers for the four subgroups in the study across race/ethnicity and nationality. All foreign-born workers had an overall wage decrease of 3 percent, with most of these losses concentrated in the adult care subgroup. Earnings for White non-Hispanic foreign-born care center workers remained the same from 2005-2015, at around $28,000, whereas non-White foreign-born workers saw a decrease of 11 percent, with annual earnings of $27,000 in 2015. Nevertheless, foreign-born workers earned more in 2015 than U.S.-born workers in center-based adult care. Non-White, foreign-born care workers had a less dramatic decrease of 4 percent for home-based adult care in 2005-2015; median earnings are lower, at $22,100 for this subgroup of care workers. Center-based child care workers’ wages increased by 11 percent for foreign-born non-Whites, but amounted to a median salary of $20,000, the lowest for a paid care subgroup among all Non-White foreign-born employees.
Table 3.2. Median Annual Earnings of Full-time, Year-round Care Workers by Type of Care Work in 2005 and 2015: White/Non-White and Immigrant/Native Status (in 2015 Dollars)
U.S.-born workers had slightly larger wage reductions, at 5 percent for non-Whites and 4 percent for Whites overall. When considered by care worker subgroup, wage growth is also particularly negative in the adult care subgroup, much like for their foreign-born counterparts. For center-based adult care, earnings dropped by 5 percent for non-Whites and 2 percent for Whites, with median annual earnings of $24,000 and $25,000 in 2015, respectively. In home-based adult care, non-Whites saw a 4 percent wage reduction ($21,000 in 2015) and White incomes dropped by 2 percent ($22,000 in 2015). As shown here, U.S.-born non-Whites had universally lower rates of wage growth in comparison with their White U.S.-born colleagues, in addition to generally lower wages, with the exception of center-based child care ($20,000 for U.S.-born Whites versus $20,800 for U.S.-born non-Whites). U.S.-born Whites saw the most wage growth in home child care, with median earnings increasing by 10 percent to $24,000 in 2015.
Despite, or perhaps because, employment in the care industry saw rapid growth of 19 percent from between 2005 and 2015, wages have failed to keep up with inflation. In many cases, real earnings are declining. Minorities and foreign-born workers are particularly affected by these decreases, and simultaneously comprise the most quickly expanding portions of the care labor force, in addition to facing other systemic barriers to economic security.
4. Conclusion: The Future of Care—Continuing Constraints on Supply in the Face of Growing Demand
The U.S. Census estimates that by 2030, about one-fifth of individuals residing in the United States will be 65 years of age or older, an increase of over 50 percent from 2010 and an increase of over 100 percent from 1970 (Ortman, Velkoff, and Hogan 2014). With the U.S. population aging and the associated proportional increase of the population with functional limitations, the demand for adult care is predicted to grow in the coming years (Congressional Budget Office 2013). At the same time, the demand for child care is likely to remain relatively constant. Although the percent of children with a working primary caregiver increased slightly between the early 1990s and 2010s, there is ample evidence that many parents, especially those with low incomes, struggle to find high quality, accessible, and affordable child care options that meet their scheduling needs (Murphey, Cooper, and Forry 2013; Sandstrom, Giesen, and Chaudry 2012; Gould and Cooke 2015; Dastur, Dutta-Gupta, Tatum, Edelman, Grant, and Goldvale 2017). In other words, the lack of affordable, quality child care depresses the use of paid child care providers and conveys a misleading impression of a lower need for child care than is actually the case. These trends in the demand for adult care and child care suggest that the care economy in the United States will continue to grow over time, especially if public subsidies for these services increase allowing families with lower incomes to make greater use of such services.
It is important to draw distinctions between the home-based and center-based care subgroups when considering the subgroup’s current and projected growth patterns. As previously described, much of the recent overall growth in care occupations has been driven by dramatic increases in the number of people employed in home-based care work (25 percent in the case of child care and 87 percent in the case of adult care). Despite these substantial increases, however, center-based care continued to employ more care workers than home-based care in both 2005 and 2015. In 2005, nearly 3.5 times more care workers were employed by centers versus in homes, and in 2015, although this ratio fell, it still remained at just over two-to-one.
Given that the majority of care workers in both years surveyed were employed in the adult care sector (about 65 percent in 2005 and about 70 percent in 2015), it is likely that one of the drivers for higher employment in institutional care is the structure of Medicaid, which, in most states, privileges institutional care expenses over home-based care expenses. As private long-term care is often expensive and Medicare offers only limited support for adult care either in homes or institutions, many seniors receive “long-term services and supports” (LTSS) through Medicaid after having outlived their other sources of financial support (Reaves and Musumeci 2015). In fact, the Kaiser Family Foundation estimated that in 2013, Medicaid paid the majority of LTSS expenses nationwide (accounting for about 51 percent of spending), compared with other public payers at 21 percent, individuals (out-of-pocket) at 19 percent, and private insurance at 8 percent (Reaves and Musumeci 2015). Because Medicaid requires states to cover nursing center care for eligible recipients but allows states some flexibility in covering home-based services, federal Medicaid regulations have an institutional bias towards center-based care (Reaves and Musumeci 2015). While this is likely to continue acting as a constraint on the use of home-based care, survey data show that many seniors prefer to stay at home over moving to a center (Harrell et al. 2014). In addition, home-based care can also be less expensive than center-based care, which can also make it an attractive option to those who need it and their families as well as public-supported programs (Reaves and Musumeci 2015).
Overall, the United States should expect to see increasing demand for care services, mainly due to the aging of the Baby Boomer population. While center-based adult care has been and will likely remain the largest care work subgroup as long as Medicaid’s coverage rules favor institutional care, it is also possible that recent growth trends in home-based care will continue, which could potentially reduce the gap in employment between center-based and home-based care work.
Despite the industry’s continued and projected growth, care wages have dropped, particularly in adult care for older, minority, and foreign-born female workers with higher levels of education and skill. Men also comprise a rapidly expanding portion of the care industry and have experienced dramatic wage decreases. But they represent only slightly more than one-tenth of the workforce and tend to have higher overall earnings and family incomes than their female counterparts.
If real earnings in care work continue to fall, it may prove more difficult to attract skilled labor to accommodate the growing demand for adult care and consistently strong child care needs in the country. Policy interventions will be needed to ensure an adequate supply of skilled workers to provide the care individuals and families need at an affordable cost.
Appendix Table A-1. Characteristics of Care Workers, 2005
Appendix Table A-2. Characteristics of Care Workers, 2015
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 In federal labor force data, care workers are included in three categories—‘childcare workers,’ ‘personal and home care aides,’ and ‘nursing, psychiatric, and home health aides.’ In the following synthesis, the second and third occupations are combined and labeled adult care, and then divided into subgroups according to the work setting. For childcare workers, those employed in ‘private households’ are considered home-based childcare providers. For adult care workers, those who work in the industries of ‘home health care services’ or ‘individual and family services’ are considered home adult care workers. Others in each group are considered institutional or center-based care providers. The federal occupational group ‘pre-kindergarten and kindergarten teachers’ is excluded from our analyses, as are registered nurses and other more highly educated professionals who sometimes work in clients’ homes, as well as in institutional settings. Thus, this report looks at only a portion of the direct care workforce that tends to have lower educational requirements, although short-term, on-the-job training is common (U.S. Department of Labor 2017).