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.
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
- Current State of the Caregiving Industry
- Should We Invest More in the Caregiving Industry?
- The Negative Impact of Unpaid Caregiving on the Economy
- Data Appendix
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|
|District of Columbia||$15.04||$20.12||$5.08|
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|
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|
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%|
|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%|
|I feel obligated to help because no one else will||33%||38%|
|Setting boundaries with how much time I commit to caregiving||29%||36%|
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.
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.
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:
- Occupational Employment and Wage Statistics (OEWS): number of home health and personal care aides in the U.S. as of May 2020 and their median hourly wage nationally and by state
- MIT Living Wage calculator: living wages for single adults without dependents in each state
- U.S. Census Bureau: 2019 estimates for number of people age 65 or older in each state
- U.S. Centers for Disease Control WONDER database: 2030 estimates for 65+ population in each state.
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.
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|
|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|
|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|
|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|
|District of Columbia||$20.12||$15.04||$5.08|