The Home Care Economy:
A Caregiving Gap is Looming

Analysis indicates lack of funding will cause millions of seniors to face caregiving shortage by 2030

· Published: September 16, 2021

Today, as many as 50 million Americans receive in-home care from either family members or professionals. Most of those receiving this care are over the age of 65, a population group that is expected to grow to 73 million by 2030.

The massive expansion of the older adult population means that demand for in-home care services will continue to surge, and this rising need is reflected in the federal government’s projections for employment of home health and personal care aides. This occupation is expected to grow by approximately 34 percent by 2029, one of the fastest growth rates of all jobs in the United States.

But recently, $400 billion in proposed funding for the home care workforce was cut from the recently passed infrastructure bill.1 Without this funding, it will be even more difficult to increase wages and improve working conditions for home health and personal care aides. Without these improvements, the home health workforce may not be able to grow fast enough to keep up with our aging population. And those ripple effects will be felt far beyond the industry itself.

Without a massive investment, home health care for the people who need it most, our seniors, may fail.

Key findings

To understand exactly how the nation stands to fall short in addressing the massive need for in-home care, we analyzed data from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and other sources, as well as our years' worth of survey data from caregivers, and the facts could not be more stark:

  • Today, the U.S. senior population stands at 58 million, but in just 10 years, that figure will rise to 73 million.
  • The aging population will create a strain on many healthcare professionals, leading to surges in job openings for these individuals. Home health and personal care aides are expected to see jobs increase by 34 percent, which analysts partially credit to an increase in demand.
  • But we think a 34 percent increase in employment may be wishful thinking, given that home health aides are routinely overworked and, according to our analysis, are massively underpaid in most states. The combination of those two factors leads to high turnover rates, among the highest in the healthcare industry. Shortages and waiting lists are already the order of the day, and in many states, including heavily senior states like Florida, ratios of caregivers to seniors are already uneven.
  • So, the only course of action to address the already wide and growing home health care gap is an investment in making home health care jobs attractive and dignified for the people in them, which will lead to better care for seniors and their loved ones. Plus, spoiler alert, we believe investing tens of millions in home health infrastructure will have a net positive effect on the entire economy, as millions of family caregivers can reenter the workforce, safe in the knowledge that their loved ones are receiving proper care.
  • The system, in fact, is already failing. And as millions more people grow into the age bracket most likely to need in-home care, those cracks will deepen and the crisis will worsen. Without a sizable investment, home health care for the people who need it most, our seniors, may fail.

Table of contents


Between 20M and 50M Americans currently receive in-home care

Almost five million Americans receive professional in-home health and personal care services,2 while as many as 15 million receive informal care services from people like spouses, children, and other loved ones.3 An AARP study places the number of family caregivers at closer to 50 million.4 While not all of the individuals who receive in-home care are older adults, the fact is that as people age and develop chronic conditions, they are far more likely to require in-home services like meal preparation, housekeeping, wound care, and health monitoring.


U.S. population growth will slow, but aging will accelerate

There are an estimated 58 million Americans today over the age of 65, but over the course of the next decade, as the youngest Baby Boomers reach that age, the ranks of older adults will swell to more than 73 million. By 2034, the number of older adults will outnumber children for the first time in the country’s history, and by 2060, almost one in four Americans will be over the age of 65.5

Between 2020 and 2030, the nation will grow by about seven percent overall, but the number of people 65 and older will grow by several times that rate (about 30 percent).


Home health aide job projections are high, but industry’s issues run deep

Through the end of this decade, only five jobs will see more rapid expansion than home health and personal care aides, as these roles swell by 34 percent.6 That’s more than nine times the average growth projections for all jobs in the American economy (four percent) and equates to more than one million new jobs for home health and personal care aides.

That’s an undeniably high growth rate, and it compares favorably with the expected expansion of the senior population. But it fails to take into account that even with the current senior population and home health aide employment levels, waiting lists for care are lengthy and most agencies are experiencing massive staffing shortages.

Michael Stair, the CEO of a home health agency in Maine, told NPR the ongoing staffing crisis in his industry is the worst he’s seen in two decades: “The bottom line is it all comes down to dollars — dollars for the home care benefit, dollars to pay people competitively.”7


Why the Industry Needs Investment Now Rather Than Later

Whatever the eventual outcome for the proposed $400 billion home health infrastructure investment, the industry is already in crisis, and millions of dollars are needed today. Aides will not join or remain in the workforce if conditions do not improve.

The turnover rate for home health aides was nearly 37 percent in 2020, and about 25 percent pre-pandemic in 2019.8 Nationally, turnover rates tend to hover around 14 percent to 18 percent for all jobs.9

What’s driving this turnover? Despite their low wages, home health aides across the country often face excessive workloads. In multiple states, there have been allegations of agencies forcing home health aides to work long hours in order to meet demand for their services. In fact, a class-action lawsuit over unpaid hours worked by home health aides allows some agencies in New York to pay for 13-hour shifts but actually require professionals to work 24-hour shifts, with many people putting in 72 hours per week.10 And in Wisconsin, another home health agency faces allegations of not paying overtime for workers, including home health aides, personal care aides, nursing assistants, and others.

And the ongoing pandemic has shed light on the poor working conditions faced by home health and personal care aides. As they cared for their elderly patients, many faced the risk of contracting COVID-19, often without an adequate supply of personal protective equipment (PPE). An investigation by the Kaiser Family Foundation and the Guardian found that nearly 3,000 U.S. healthcare workers died from COVID-19 in 2020, many of them home health aides and about one-third involving a lack of PPE.11

Those carrying the professional in-home care burden tend to be women and people of color. Communities of color are chronically underserved in wages, housing, healthcare, and many other areas. Approximately 85 percent of home health/personal care aides are women, 60 percent are people of color, and more than half are over the age of 45. Additionally, 28% of home health and personal care aides immigrated to the U.S., compared to just 14% of the general U.S. population.12 

Most home care aides don’t earn a living wage

With a median hourly wage of just over $13, a home health/personal care aide working full time (2,080 hours per year) would earn about $27,000 per year. That’s less than half the median annual wage for American workers.13 

Wages may need to become more competitive in order to grow the home health and personal care workforce. Only four states (Alaska, North Dakota, South Dakota, and Wyoming) have median annual wage levels for home health and personal care aides that’s at or above the liveable wage for the state, according to our analysis, which uses data from the U.S. Bureau of Labor Statistics and MIT’s Living Wage Calculator. An estimated 37 percent14 of home care workers live near or below the federal poverty line and one in four15 have children at home.

Elevating all home health and personal care aides to a living wage in their state would cost $106 billion per year, or $51 million per hour, according to data from the MIT Living Wage Calculator. Ensuring all home care workers earn a dignified wage would incentivize more people to join the industry and help reduce high turnover rates.

The current median hourly wage for home health and personal care aides ranges from a low of $9.04 in Louisiana to a high of $16.66 in Alaska, with an overall national median of $13.02. In many places, this is barely more than what a fast-food worker earns.

Some states are poorly positioned to be able to elevate home health aides’ wages based on what they earn now and how much the average person needs to make to earn a living wage. For example, Hawaii’s median hourly wage for home health/personal care aides is just above the national median, but because the state is one of the most expensive places in the country, Hawaii has the highest difference between its hourly wage for home health professionals and the living wage for a single adult.


Difference between hourly median wage for home health/personal care aides and MIT living wage for state, 10 biggest gaps
State Current median hourly wage Living wage for single adult Difference
Hawaii $13.35 $19.43 $6.08
Virginia $10.69 $16.61 $5.92
District of Columbia $15.04 $20.12 $5.08
Louisiana $9.04 $14.06 $5.02
California $14.05 $18.66 $4.61
Alabama $9.58 $13.77 $4.19
Georgia $11.17 $15.36 $4.19
North Carolina $10.74 $14.72 $3.98
Texas $10.11 $14.01 $3.90
New York $14.86 $18.62 $3.76

Table Reference16


Basic benefits are hard to come by

Not only are wages low for home health aides, but they often lack employer-provided health insurance, which can take even more money out of their pockets. In fact, only 38 percent of home care workers receive coverage through their employer or union. For comparison, more than 60 percent of workers in the industry who are employed by nursing homes receive health insurance coverage at work. An estimated 16 percent of home care workers have no health insurance coverage at all.17

To extend employer-provided health insurance to each home health and personal care aide would cost an additional $19 billion today, based on a Kaiser Family Foundation analysis of average employer-paid health insurance premiums for individuals.18 Providing this benefit could go a long way in attracting workers to the field and retaining existing aides.


Home health jobs will surge, but not enough to change status quo

It’s true that the nation is projected to see rapid growth in home health/personal care aide employment, but that growth is unlikely to be enough to do anything but maintain a failing status quo.

Through the end of this decade, only five jobs will see more rapid expansion than home health and personal care aides, as these roles swell by 34 percent.19 That’s more than nine times the average growth projections for all jobs in the American economy (four percent) and equates to more than one million new jobs for home health and personal care aides.

The projected ratio of seniors to home health aides in 2030 will remain around 16:1, the current nationwide ratio. But not all states are equal when it comes to senior population projections. Around 1.2 million new home health/personal care aide openings are expected by the end of the decade, but some states will need more drastic staffing increases than others.

Home health aides increases needed today to meet national average ratio of seniors to workers, 10 highest
State Current number of home health and personal care aides Total aides needed to meet national average ratio of seniors to aides (16:1) Difference
Florida 72,680 281,137 208,457
Georgia 42,050 95,200 53,150
North Carolina 62,700 109,433 46,733
Tennessee 26,560 71,185 44,625
Michigan 68,510 110,401 41,891
Illinois 91,130 127,835 36,705
Ohio 91,910 127,722 35,812
New Jersey 56,630 92,192 35,562
Alabama 20,300 53,395 33,095
Virginia 53,190 84,896 31,706

More than 35 states fall below the average national ratio of home health aides to adults over 65 (16:1). Taking into account how states’ populations of older adults will change, by 2030, another 10 states will fall short of the ratio.

Increase in home health aide employment needed to keep up with projected population of people age 65 or older, 10 highest
State Projected 65+ population in 2030 Number of home health/personal care aides needed in 2030 Percent increase in aides needed by 2030
Florida 7,769,452 485,591 568%
South Dakota 185,064 11,567 273%
Tennessee 1,417,708 88,607 234%
Nevada 797,179 49,824 232%
Alabama 1,039,160 64,948 220%
New Hampshire 352,786 22,049 196%
Georgia 1,907,837 119,240 184%
Oklahoma 757,553 47,347 155%
South Carolina 1,134,459 70,904 150%
Kentucky 903,450 56,466 139%

To see how the senior population will shift over the next ten years in all fifty states, see our data appendix.

Unpaid Caregiving: The Ghost Home Care Economy


More than one in five Americans provide unpaid caregiving, according to an analysis by AARP, and the number has risen by 22 percent in just the past few years.20 With the massive expansion of seniors projected, that number will only keep growing. Unpaid caregiving creates economic drain by taking people out of the workforce, and it creates emotional strain on families. Even for those who feel proud to help care for aging loved ones, making home care more accessible would give them the option. Many families today simply don’t have the choice.

Investing in the professional home health economy would make it easier for family caregivers to shift that burden to hired help, and additional return on investment would have knock-on effects across the economy.

Unpaid caregiving is already rising & will keep expanding as nation ages


Our survey of caregivers found that 51 percent of them provide care for someone over 60 with no additional assistance, and 77 percent provide unpaid care multiple times per week.

Expanding the ranks of home health aides would allow family caregivers to spend more time at their jobs and less time doing unpaid work, creating a huge economic impact. AARP estimates that letting more family caregivers over 50, such as those who care for a senior spouse, stay in the workforce would add nearly $2 trillion to the national GDP in 2030.

Sixty-three percent of the caregivers we surveyed are women, and other research has indicated that women bear the brunt of unpaid family care. Enabling more women to remain in the workforce or take part in it more fully would generate millions in economic impact every year.

Unpaid caregiving creates emotional & financial strain


Family caregivers, particularly those who are sole caretakers, are more likely to lose sleep, experience depression, and express financial strain than those who have additional help caring for aging loved ones.

Reported difficulties experienced as caregiver
Difficulty Sole caregivers 1+ others
Loss of sleep 48% 40%
Depression 38% 33%
Financial strain 33% 20%
Need more help but don’t want to ask 29% 17%

Caregivers were also more likely to report emotional, financial, and physical strain the longer they’d been caring for a loved one, which is of particular concern as the nation continues to age and Americans live longer than those in previous generations.

Reported caregiver difficulties by length of time providing care
Difficulty 5 years or fewer More than 5 years
Balancing caregiving with the rest of my responsibilities or desires 48% 74%
Emotional stress 46% 67%
Physical demands 39% 45%
Depression 33% 43%
I feel obligated to help because no one else will 33% 38%
Setting boundaries with how much time I commit to caregiving 29% 36%
Financial strain 25% 31%

One in three family caregivers said they experienced financial strain in caring for a loved one, and 85 percent indicated that finances would likely be a barrier to hiring caregivers like home health and personal care aides.


Conclusion

Ensuring that America’s seniors receive the type of care that will let them age with dignity in their own homes is possible, but it requires policy makers, providers, and families to consider what it will take to deliver this care effectively.

That means not only what is effective for seniors and their families but the professionals hired to provide this care and family members and loved ones providing unpaid care. There is no other option as a wave of Baby Boomers enters retirement age with Generation X, the oldest of whom turn 56 this year, right behind them.

Not only is providing this in-home care critical to ensuring seniors can age with dignity, but investing in home health care means those working in the industry earn a decent wage and family caregivers are able to fully participate in the workforce. Put another way: The U.S. cannot afford not to make this investment.


Our Data

In 2021, SeniorLiving surveyed 202 caregivers of people aged 60 or older. “Caregiver” was defined as someone who provides support to another individual by providing financial aid, managing medical appointments, cooking, cleaning, running errands, helping with bill payments, tracking medication schedules, or assisting with other day to day living responsibilities. Further research should be conducted on this population.

In addition we analyzed data from several other sources to calculate the cost of the home care economy in the United States:

We also explored the 2019 American Community Survey via ipums.org to find demographic information on home health and personal care aides including sex, age, race, ethnicity, and immigration status.

To determine the number of home health aides and individuals aged 65 or older between 2020 and 2030, we began with projections for both populations for 2020 and 2030. Then we assumed a constant growth rate between the dates.

Data Appendix

Take a closer look at the data underlying this analysis:


Projected 65+ population by state, 2019-2030
State 2019 population (65+) 2030 projection (65+) Percentage change in senior population
Arizona 1,307,241 2,371,354 81%
Florida 4,498,198 7,769,452 73%
Nevada 498,219 797,179 60%
New Mexico 377,730 555,184 47%
California 5,834,998 8,288,241 42%
Wyoming 98,789 138,586 40%
Alaska 90,588 127,202 40%
New Hampshire 253,147 352,786 39%
Vermont 125,201 173,940 39%
Texas 3,738,727 5,186,185 39%
Virginia 1,358,336 1,843,988 36%
New Jersey 1,475,075 1,959,545 33%
Rhode Island 187,155 246,507 32%
Maine 285,978 374,017 31%
Montana 207,909 269,558 30%
Mississippi 486,804 634,067 30%
Maryland 959,887 1,235,695 29%
Washington 1,207,685 1,563,901 29%
Wisconsin 1,019,896 1,312,225 29%
Minnesota 921,491 1,193,124 29%
Louisiana 742,194 944,212 27%
North Dakota 120,177 152,358 27%
Utah 365,198 460,553 26%
Connecticut 629,032 794,405 26%
Georgia 1,523,192 1,907,837 25%
Arkansas 524,237 656,406 25%
Delaware 189,638 237,823 25%
Idaho 288,617 361,033 25%
Massachusetts 1,172,293 1,463,110 25%
Tennessee 1,138,965 1,417,708 24%
North Carolina 1,750,935 2,173,173 24%
Kansas 477,996 593,091 24%
Missouri 1,057,943 1,301,714 23%
Alabama 854,312 1,039,160 22%
South Carolina 935,538 1,134,459 21%
Hawaii 269,470 326,957 21%
Pennsylvania 2,388,218 2,890,068 21%
South Dakota 153,799 185,064 20%
Kentucky 754,559 903,450 20%
Nebraska 312,295 375,811 20%
Iowa 553,575 663,186 20%
Oklahoma 635,222 757,553 19%
New York 3,295,968 3,916,891 19%
Michigan 1,766,409 2,080,725 18%
Illinois 2,045,361 2,412,177 18%
West Virginia 367,400 426,443 16%
Oregon 767,496 881,957 15%
Ohio 2,043,548 2,357,022 15%
Indiana 1,084,472 1,231,873 14%
Colorado 845,378 956,278 13%
District of Columbia 87,537 58,238 -33%
Employment increase required to meet 16:1 senior-to-home health aide ratio, 2030
State Current employment Number needed by 2030 Percentage increase
Florida 72,680 498,042 585%
South Dakota 3,100 11,863 283%
Tennessee 26,560 90,879 242%
Nevada 14,990 51,101 241%
Alabama 20,300 66,613 228%
New Hampshire 7,440 22,614 204%
Georgia 42,050 122,297 191%
Oklahoma 18,560 48,561 162%
South Carolina 28,350 72,722 157%
Kentucky 23,630 57,913 145%
Wyoming 3,670 8,884 142%
Maryland 32,690 79,211 142%
Hawaii 9,020 20,959 132%
Rhode Island 6,970 15,802 127%
Virginia 53,190 118,204 122%
New Jersey 56,630 125,612 122%
North Carolina 62,700 139,306 122%
Arizona 69,060 152,010 120%
Montana 7,850 17,279 120%
Mississippi 18,570 40,645 119%
Arkansas 20,170 42,077 109%
Nebraska 11,890 24,090 103%
Utah 14,740 29,523 100%
Indiana 40,280 78,966 96%
Michigan 68,510 133,380 95%
Iowa 21,890 42,512 94%
Delaware 8,040 15,245 90%
West Virginia 15,400 27,336 78%
Oregon 32,120 56,536 76%
Washington 58,000 100,250 73%
Illinois 91,130 154,627 70%
Louisiana 36,020 60,526 68%
Colorado 36,610 61,300 67%
Ohio 91,910 151,091 64%
North Dakota 6,210 9,767 57%
Kansas 24,250 38,019 57%
Vermont 7,260 11,150 54%
Connecticut 34,060 50,923 50%
Maine 16,510 23,975 45%
Idaho 17,530 23,143 32%
Alaska 6,480 8,154 26%
Wisconsin 72,790 84,117 16%
New Mexico 31,090 35,589 14%
Missouri 73,510 83,443 14%
Texas 309,540 332,448 7%
Pennsylvania 197,570 185,261 -6%
California 597,500 531,298 -11%
Massachusetts 109,350 93,789 -14%
Minnesota 102,490 76,482 -25%
New York 469,370 251,083 -47%
District of Columbia 11,330 3,733 -67%
Employment increase required to meet 10:1 senior-to-home health aide ratio, 2030
State Current employment Number needed by 2030 Percentage increase
Florida 72,680 776,945 969%
South Dakota 3,100 18,506 497%
Tennessee 26,560 141,771 434%
Nevada 14,990 79,718 432%
Alabama 20,300 103,916 412%
New Hampshire 7,440 35,279 374%
Georgia 42,050 190,784 354%
Oklahoma 18,560 75,755 308%
South Carolina 28,350 113,446 300%
Kentucky 23,630 90,345 282%
Wyoming 3,670 13,859 278%
Maryland 32,690 123,570 278%
Hawaii 9,020 32,696 262%
Rhode Island 6,970 24,651 254%
Virginia 53,190 184,399 247%
New Jersey 56,630 195,955 246%
North Carolina 62,700 217,317 247%
Arizona 69,060 237,135 243%
Montana 7,850 26,956 243%
Mississippi 18,570 63,407 241%
Arkansas 20,170 65,641 225%
Nebraska 11,890 37,581 216%
Utah 14,740 46,055 212%
Indiana 40,280 123,187 206%
Michigan 68,510 208,073 204%
Iowa 21,890 66,319 203%
Delaware 8,040 23,782 196%
West Virginia 15,400 42,644 177%
Oregon 32,120 88,196 175%
Washington 58,000 156,390 170%
Illinois 91,130 241,218 165%
Louisiana 36,020 94,421 162%
Colorado 36,610 95,628 161%
Ohio 91,910 235,702 156%
North Dakota 6,210 15,236 145%
Kansas 24,250 59,309 145%
Vermont 7,260 17,394 140%
Connecticut 34,060 79,441 133%
Maine 16,510 37,402 127%
Idaho 17,530 36,103 106%
Alaska 6,480 12,720 96%
Wisconsin 72,790 131,223 80%
New Mexico 31,090 55,518 79%
Missouri 73,510 130,171 77%
Texas 309,540 518,619 68%
Pennsylvania 197,570 289,007 46%
California 597,500 828,824 39%
Massachusetts 109,350 146,311 34%
Minnesota 102,490 119,312 16%
New York 469,370 391,689 -17%
District of Columbia 11,330 5,824 -49%
Living wage vs. hourly median home health/personal care aide wage by state
State MIT living wage Hourly median home health/personal care aide wage Difference from hourly median to MIT living wage
Hawaii $19.43 $13.35 $6.08
Virginia $16.61 $10.69 $5.92
District of Columbia $20.12 $15.04 $5.08
Louisiana $14.06 $9.04 $5.02
California $18.66 $14.05 $4.61
Alabama $13.77 $9.58 $4.19
Georgia $15.36 $11.17 $4.19
North Carolina $14.72 $10.74 $3.98
Texas $14.01 $10.11 $3.90
New York $18.62 $14.86 $3.76
Maryland $17.25 $13.51 $3.74
Oklahoma $13.53 $9.80 $3.73
Delaware $15.32 $11.65 $3.67
South Carolina $14.58 $11.00 $3.58
New Mexico $13.97 $10.52 $3.45
New Jersey $16.20 $12.76 $3.44
West Virginia $13.38 $9.97 $3.41
Florida $14.82 $11.61 $3.21
Mississippi $13.43 $10.25 $3.18
Kansas $13.51 $10.97 $2.54
Colorado $16.35 $13.83 $2.52
Oregon $16.85 $14.33 $2.52
Tennessee $13.25 $10.88 $2.37
Connecticut $15.98 $13.62 $2.36
Arkansas $13.29 $10.97 $2.32
Idaho $13.95 $11.65 $2.30
Missouri $13.72 $11.44 $2.28
Arizona $14.94 $12.70 $2.24
Nevada $13.67 $11.69 $1.98
Illinois $15.37 $13.46 $1.91
Indiana $13.44 $11.63 $1.81
Michigan $13.63 $11.85 $1.78
Ohio $13.16 $11.41 $1.75
Wisconsin $14.02 $12.32 $1.70
Kentucky $13.48 $11.89 $1.59
Utah $14.52 $13.14 $1.38
Massachusetts $17.74 $16.38 $1.36
Washington $16.34 $15.14 $1.20
Maine $14.92 $13.80 $1.12
Montana $13.94 $12.82 $1.12
Pennsylvania $13.39 $12.40 $0.99
New Hampshire $14.47 $13.54 $0.93
Minnesota $14.90 $14.00 $0.90
Nebraska $13.57 $12.70 $0.87
Rhode Island $14.79 $14.39 $0.40
Iowa $13.62 $13.23 $0.39
Vermont $14.93 $14.87 $0.06
Wyoming $13.19 $13.35 -$0.16
South Dakota $12.61 $13.08 -$0.47
Alaska $15.06 $16.66 -$1.60
North Dakota $13.08 $16.22 -$3.14

References

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  14. https://phinational.org/wp-content/uploads/legacy/phi-home-care-workers-key-facts.pdf
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