According to new research, raising the minimum wage by as little as 10 percent would significantly improve the safety and health of nursing home residents. A visiting scholar at the Minneapolis Federal Reserve, Krista Ruffini recently published her findings on the impact of increasing the minimum wage on nursing home quality and turnover. She compared facilities in hundreds of U.S. counties that increased their minimum wage between 1990 to 2017 with those that had not. In this article, we will summarize Ruffini’s findings and shed light on the suggested implications for nursing home residents.
The impact of low nursing home worker wages
Nursing assistants provide the most direct care in nursing homes. They help residents with daily living activities, like eating, bathing, and dressing. They also work with certified nurses and elder care teams to monitor patients’ conditions.
While nursing assistants make up about 40 percent of the nursing home workforce, they are among the lowest-paid workers in the U.S. economy, earning less than $14/hour. Due, in part, to their low wages, nursing assistants frequently change jobs for better pay or working conditions. According to Ruffini, “Between 60 percent and 85 percent of nursing assistants leave their employers each year, most often to go work in other nursing homes.” As a result, Ruffini says that nursing homes frequently report difficulty recruiting and retaining staff, thereby lowering continuity of care.
How can a worker wage increase benefit nursing home residents?
By increasing the federal minimum wage by 10 percent, Ruffini estimates that nursing assistant earnings would increase by $325 to $560 per year. She suggests two primary implications of this modest wage increase for nursing home workers:
Increased quality of care
In findings based on preliminary data published in a working paper, Ruffini found that increasing the minimum wage by 10 percent would:
- Reduce health inspection violations by 1 to 2 percent
- Reduce the number of nursing home residents with moderate to severe pressure ulcers [bed sores] by about 1.7 percent
- Prevent nursing home deaths by 3 percent, or 15,000, per year
- Reduce the cost of preventable care
Increased quality of care has particular relevance when the COVID-19 pandemic is overwhelming nursing homes. Comparing a facility’s number of COVID-19 deaths with its quality-of-care performance, Ruffini concluded, “The data provide some suggestive evidence that higher service quality is associated with fewer deaths from COVID-19 in nursing homes.”
Increased continuity of care
Ruffini also found that nursing homes that raised the minimum wage of nursing home workers reduced turnover and increased tenure among nursing home staff, primarily nursing assistants. She says that reduced turnover and more stable hires provided a greater continuity of care, which translated into improved health and safety conditions for the patients.
How do wage increases affect nursing home profits?
According to Ruffini’s findings, the nursing homes that increased worker wages experienced relatively steady profits because the extra staff costs were offset by increased fees and efforts to attract patients with a greater ability to pay. She also suggests that higher wages for nursing home workers can be “fully offset by improvements in care,” citing that savings from pressure ulcers alone account for “up to half the increased wage bill.”
In a proposed policy reform, Ruffini points to incorporating staffing costs into Medicare reimbursement rates to allow facilities that pay higher wages to receive more revenue, even further protecting nursing home profit margins.
To learn more, read Ruffini’s paper and reference an article she wrote for the Washington Center for Equitable Growth. For further reading, see the New York Times article on Ruffini’s research and another minimum wage study.