This feature is part of an ongoing RSF blog series, Work in Progress, which highlights some of the research of our current class of Visiting Scholars.

Paul Osterman (MIT) is co-author of the 2011 RSF book Good Jobs America and a current Visiting Scholar. During his time in residence, Osterman is examining strategies for improving job quality in the low-wage labor market, specifically through initiatives that encourage employers to improve their human resource policies. In order to aid the development of policies that lead to better wages and benefits in the private sector, he will investigate the conditions that incentivize firms to improve their employment practices, focusing on the health care and manufacturing industries.

In a new interview with the Foundation, Osterman focused on low-wage home care aides, discussing the existing barriers to increasing their pay, and offering solutions for improving job quality for this group in the future.

Q. Your current research examines the plight of low-wage home care aides. What makes this group of workers especially vulnerable in ways that other professions in the medical industry are not?

There are two kinds of home care aides—home health aides and personal care assistants—who make on average about $10/hour. In New York State they also receive benefits, but this isn’t the case for all states. There are a couple things that can explain these home care aides’ low wages.

While most people would agree that these workers make a big difference in terms of patient outcome, as a group, they still tend to be invisible in the health care system. For instance, if you ask doctors or nurses about home care aides, they’ll agree that they’re important, but in terms of their day-to-day work and how they think about health care, they don’t consider home care aides part of the story. Home care aides tend to be women, they tend to be low-educated, and they tend to be immigrants—all groups which are disadvantaged in this economy.

Finally, health care costs are currently under a lot of pressure, particularly in states that are implementing managed care, which creates risk contracts for providers and puts pressure on them to reduce payments. Given that home care aides make up a vulnerable work force that is relatively invisible, they are the ones who tend to bear the brunt of those costs.

Q. Why has it been so hard to raise wages for this group? For example, what has stood in the way of rulings that have attempted to make this group of workers eligible for the federal minimum wage?

Minimum wage legislation, while important, is a little complicated. The federal minimum wage now is $7.25, and home care aides make more than that. The real impact of minimum wage laws for home care aides is on overtime. In other words, if a home health aide is working more than 40 hours per week, under the proposed new interpretation of minimum wage legislation, they would receive overtime for those extra hours.

The reason it’s been difficult to raise wages for aides is primarily because there are so few advocates for them. Within the health care industry, people like doctors and nurses are very well organized, but home health aides don’t have much representation. There are a couple of states where they’re unionized, such as New York, where the union is actually quite strong. But even in New York, aides are still only paid about $10/hour—which is just a few cents more than non-unionized aides in other states—plus benefits. So there really aren’t very many strong advocates for this group.

Q. Given what we know about the barriers to creating a living wage for home care aides, what kinds of policies (both private and public) would help improve the quality of the job, in terms of pay, stability, and hours?

The argument I’m going to make in my forthcoming Russell Sage book is that we need to reconceive these jobs. Broadly reorienting home care aides’ roles and job descriptions will create an opening for improving job quality by enabling advocates to make the case for better paid work for these aides. We should ALSO continue to keep pressure on the system by trying to improve representation of home care aides and putting more resources into elder care, but we’ll also have to change the nature of these jobs in order to make a fundamental difference.

In the future, managed care will be a double edged sword. Managed care was put into place to control health costs, so it creates some incentives to cut or reduce services and expenditures. However, on the other hand, it also creates incentives to move in the direction that’s most efficient in getting outcomes for equal dollar. So if you can make the case that a certain program can deliver better patient outcomes for a given dollar, then there will be a way to move forward. The other issue is that as the baby boom generation ages, there’s going to be increasing pressure for elder care of various kinds, which will certainly play a role in the changing nature of home care work.