The elderly caregiving crisis is an economic problem
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Illustration: Sarah Grillo/Axios
Kamala Harris' proposal to create a Medicare benefit for long-term home care targets an underappreciated part of the economy: caregiving.
Why it matters: The sector is staffed by underpaid and unpaid workers — mostly women — carrying out crucial jobs that will only become more important as the population ages.
Where it stands: Aging adults or those with disabilities who need home care pay for it out of pocket, spending upward of $100,000. That's a huge expense that drains bank accounts, as Axios' Maya Goldman and Ivana Saric explain.
- Some wind up in nursing homes, a more costly alternative that many don't necessarily need. Many spend down their assets so they can qualify for Medicaid, which does cover at-home care.
Follow the money: Even as they're in high demand and the care sector becomes an increasingly large part of the economy, care workers don't make very much money.
- Home health care workers, overwhelmingly women, earn around $16 an hour, on average, per government data — slightly less than what retail sales workers make and roughly the same mean hourly wage as animal caretakers.
- And there are millions more people who do this work for no money at all, typically adult children caring for their elderly parents. They are mainly women, too.
- Plenty of them wind up putting their careers on hold, stepping out of the workforce, or scaling back at work to do this labor of love.
Zoom in: If Medicare were to provide some kind of universal home-care coverage, something policy experts have recommended — Harris' plan is based partly on a Brookings paper — that could reshape the way this market works.
- It would be hard to expand home health care coverage without making jobs better — increasing wages, providing better benefits, etc.
- You don't just get a bunch of people to shift into these jobs without improving job quality. Without doing that, "it wouldn't work," says Aaron Sojourner, a senior researcher at the W.E. Upjohn Institute for Employment Research.
Between the lines: Many policymakers are in the habit of thinking of care as a personal issue rather than an economic concern, says Jocelyn Frye, president of the National Partnership for Women & Families Action Fund, a progressive advocacy group.
- But this is something that "actually affects how our economy functions and the economic stability of families."
- A better system would keep more women in the workforce, and raise the economic prospects of those who do this work for a living.
- That could even lead to an economic expansion as more unpaid work becomes paid work, and those unpaid workers enter the labor market.
Of note: The Trump campaign's policy platform also deals with elder care, by proposing to "shift resources back to at-home senior care" and support family caregivers through tax credits.
Reality check: Though it's possible that spending more on home care could lower costs in other arenas (fewer hospitalizations, etc.), Harris' proposal would be costly and politically tough to make happen.
What's next: This is a corner of the job market with a lot of potential for growth. Caregiving isn't the kind of work that can be outsourced, either to another country or to artificial intelligence.
- "This is the future of the economy. This sector. This workforce," says Sojourner.
Charted: Increasing dependence
The share of the population that's elderly is rising steeply; while the share who are working age holds fairly steady. It's a formula for a care crisis.
Why it matters: The fast-increasing age-dependency ratio — which looks at the number of adults age 64 and up, compared to the working-age population — poses big problems for the economy.
The big picture: This is a crisis facing all rich countries — and some are deeper into it. In Japan, the age-dependency ratio is 51%, meaning there are 51 elderly people for every 100 working-age adults.
- In the U.S. the age dependency ratio is 27%. In 1960 the ratio was 15%.
- The number is projected to grow from here, says Sojourner.
State of play: There's an increasing need for caregivers to help look after the aging population, particularly as older adults have fewer children (or none) to care for them. Even when adult children are in the picture they may live too far away to be of help.
- It's a problem that can be solved by making caregiving jobs more appealing, or by immigration — though the politics of the latter solution make things more complicated.
For example: In one town in West Virginia, where anti-immigrant sentiment is strong, there are so many elderly people and so few workers to care for them, that some older people have died before getting off the wait list for a home health aide, the Wall Street Journal reported earlier this year.
