Reducing penalties and improving wages in the home health care and child care sectors: Various benchmarks for setting wage standards for care workers
|Home health care workers1||Child care workers2|
|Current average wage||$13.81||$13.51|
|Economy wide wage standards|
|Living wage (least expensive U.S. metro area)3||$21.11||$21.11|
|Reducing pay disparities|
|Reducing care penalties4||$15.74||$15.47|
|Reducing demographic penalties5||$20.20||$19.87|
|Add union premium6||$22.26||$21.90|
|Adopt international standards|
|Adopt wages for other teacher professions|
|Education-adjusted elementary/middle school salaries9||$21.22|
|Removing teacher penalty10||$25.30|
Notes: Wages are based on pooled 2018 to 2020 microdata from the Economic Policy Institute’s extracts of the Current Population Survey, reported in 2020 dollars.
Notes: Wages are based on pooled 2018 to 2020 microdata from the Economic Policy Institute’s extracts of the Current Population Survey, reported in 2020 dollars. (1) Home health care workers are identified in EPI’s CPS extracts by the occupations nursing, psychiatric, and home health aides, and personal and home care aides and the industries private households, home health care services, individual and family services. (2) Child care workers are defined by the child care worker occupation. (3) The Brownsville/Harlingen metro area in Texas is the lowest cost metro area for one adult and one child, according the EPI’s Family Budget Calculator. We adjust the annual required budget for basic necessities for inflation to 2020 and divide by 2080 to reflect the required hourly wage to satisfy that family budget solely with full-time labor earnings. (4) We reduce the care penalties among care workers by applying the 15% penalty among women and 6% penalty among men from Budig, Hodges, and England (2019) proportionately to women and men in each care occupation. (5) We calculate demographic penalties in a log wage regression on interacted gender-race/ethnicity-citizenship status controlling for age, age squared, educational attainment, and geographic division. The statistically significant coefficients are then applied proportionately to the shares each demographic group is found in the relevant care occupation. (6) We apply the union premium of 10.2% as reported in this EPI factsheet. (7) Dubois (2021) reports that across the current 27 E.U. member states, non-residential long-term care workers are paid 80% of the average national hourly wage. (8) Dubois (2021) reports that across the current 27 E.U. member states, the best performers, Netherlands and Norway, are among the few who not only universal rights to provision of care services. They pay non-residential long-term care workers 95% of average wages. (9) This procedure uses actual weekly earnings for elementary and middle school teachers by educational attainment from EPI’s CPS extracts and applies that to the educational attainment shares for child care workers to create weekly earnings of child care worker wages with a college or advanced degree. For educational attainments lower than a college degree, we apply the overall weekly earnings ratio of that level of educational attainment to the one needed. We apply the ratio of weekly earnings from child care workers to the imputed value to back out a child care hourly wage. (10) We apply the teacher pay penalty of 19.2% found in Allegretto and Mishel (2020).
Source: Economic Policy Institute (EPI) analysis of Current Population Survey Outgoing Rotation Group (ORG) microdata, EPI Current Population Survey Extracts, Version 1.0.18 (2021), https://microdata.epi.org.