Caregiving Crisis: Low Pay, Tough Job, Few Workers, Aging Population
Who can you call when Mom or Dad needs care?
Ric Edelman: It's Wednesday, February 1st. Our podcast now one month old or 32 years and one month if you're counting my long record as one of the nation's top talk show hosts on radio. But we're really excited. The show is one month old. Apple says that they offer two and a half million podcasts to their platform. And this program, The Truth About Your Future with Ric Edelman debuted on the Apple platform at number 124 in the business category. A pretty good start. So please tell your friends about this podcast and invite them to download it like you do.
I've got new data for you on paid caregivers. This data is from 2021 - the most recent available that just got published. 65% of caregivers in 2021 were people who had quit their jobs or got fired because of their caregiving duties. We've got a huge, major supply gap. The number of caregivers we need versus the number of caregivers we have. There are now more than 2 million paid home care workers. That's double the number it was in 2008. But the Department of Labor says we're going to need 3 million over the next decade, another 50% increase. They say the number of home healthcare and personal care aides is going to grow radically more than growth in all occupations.
Where do you find a home health aide? Well, you call a home care agency. These are essentially employment agencies in the home care field. They don't have enough workers to meet demand. 60% of them say they consistently turn business away because they just don't have the staff. They've all increased pay to get more people to come work for them, some by as much as $20,000 a year. Some of these organizations, 40% of them are offering signing bonuses as well. You'd think this is a Wall Street outfit.
The problem is overall wages are still pretty darn low. The average pay to be a home healthcare aide is $30,000 a year. No wonder people don't want the job. It works really hard. Patients can be difficult. The work can be physically and emotionally challenging. The hours are long, hard, often involving nights and weekends. And it's just $30,000 a year.
So although that's all they're earning, I don't want you to think that's all you're going to be paying, because like I said, you're not going to just hire someone to be a home health aide. You're going to hire someone through an agency. The agency is going to charge you $75,000 a year for that worker. The worker gets $30,000 and the agency keeps the rest. Now, if you need a caregiver for your spouse or parent, you can't find one. Oh, my. This is pretty darn stressful. And that's even assuming you can afford to pay for a caregiver.
What if you get a phone call from a caregiver who says they're not coming in to work today, they're sick or their car broke down or their own kid is sick or whatever. You're now scrambling to find a substitute, or you'll end up having to take time off of work. Your career's on the line. That's why so many family caregivers give up their own jobs, turn down promotions, or cut back to part-time work. And if the agency you hired keeps sending different people to the house, now you've got a whole new, different set of stress. The parent who needs the care, they don't know who this person is. If they've got dementia and they get confused easily.
Well, this is really compounding the problem. And every time you get a new caregiver, you have to train them. Things like where the toothpaste is, what time mom eats, the TV shows that she likes to watch. This is why a lot of folks discover that you need to hire two caregivers, each with different shifts, and you've got to keep a checklist of daily routines handy with the times listed for showers and meals and medications and so on. So someone new showing up knows what to do and when to do it. You might even consider hiring a geriatric care manager to coordinate all of this for you. That’s an additional expense.
One in two retirees are going to need care at some point. Make sure you don't enter retirement without money. And make sure you talk with parents and children now about creating a plan for securing caregivers and working with them. This is a huge growth opportunity in the advice area for financial advisors because clients are aging and as they do, the need for caregiving increases.