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News from EPI New report shows how care workers are undervalued and deserve higher wages

A new EPI report shows that child care and home health care workers are deeply undervalued and underpaid—and estimates what fair and equitable wages would look like in the care sectors. The report comes as Congress debates the Build Back Better Act, which includes historic investments in child care and home health care to lower costs for families.

The average hourly wage for early care and education workers and home health care workers is $13.51 and $13.81, respectively—about half the economywide average hourly wage. For a full-time worker, this translates to less than $30,000 a year.

As the report authors explain, the devaluation of the care sector is fundamentally intertwined with historical and current ableism, sexism, xenophobia, and racism. Child care workers are overwhelmingly women (94%) and disproportionately Black (15.6%, compared with 12.1% in the overall workforce) and Hispanic (23.6%, compared with 17.5% in the overall workforce). Similarly, home health care workers are also largely women (88.6%) and disproportionately Black (23.9%) and Hispanic (21.8%). More than one in five child care workers and roughly three in 10 home health care workers were born outside the U.S.

“Addressing the wage suppression of care workers is unmistakably an intersectional gender, racial justice, disability, and immigrant rights issue. Strong labor standards and well-paying careers, along with centering the needs of people with disabilities and older adults, should drive our efforts to build a well-functioning and rewarding care economy. High-quality care is a moral imperative,” says Marokey Sawo, state economic analyst at EPI and co-author of the report.

The report also presents a set of benchmarks for setting higher wages for child care and home health care workers, finding that care workers should be paid, at minimum, an hourly wage between $21.11 and $25.95, depending on the benchmark applied. These benchmarks include an estimated strong wage standard that reduces wage penalties currently faced for performing care work and reduces penalties associated with racial and gender discrimination, and a look at other countries or professions for reasonable benchmarks, among others.

“The care system is unaffordable for many families while simultaneously stranding many care workers in poverty,” says Elise Gould, EPI senior economist and co-author of the report. “Investing seriously and significantly in care infrastructure—in which higher wages for care workers is a key plank—would be transformative. Care workers deserve to share in the economic security and happiness that their work helps to provide for millions of people.”

The authors also note that higher wages must go hand in hand with other nonwage benefits such as paid leave, health insurance, and retirement benefits. Over half of workers overall have employer-sponsored health insurance, compared with one-fifth of child care workers and one-quarter of home health care workers. One-third of workers overall have retirement benefits compared with only about one in 10 child care workers and one in eight home health care workers.

Higher wages for care workers would have numerous macroeconomic benefits as well. A better-paid care workforce can provide macroeconomic stimulus as workers spend more money on goods and services in the economy.

“Higher wages would drastically improve care workers’ lives and financial security. Better pay also translates into higher retention, lower turnover, and increased possibility for recruitment, which all help employers as well as care workers, who bear the burden of short-staffing and constant change,” says Asha Banerjee, economic analyst at EPI and co-author of the report. “Those receiving care would also greatly benefit from the stability of a more secure care workforce.”