$15 Minimum Wage Will Have Big Impact on Senior Care

April 11, 2019

by Rob Roper

Everyone understands that raising the minimum wage from today’s rate of $10.78 to $15 an hour will have an inflationary effect on the overall costs of goods and services. However, some sectors of the economy will be impacted more than others. Legal fees, for example, probably wouldn’t change much as a result of the new policy, but the home and healthcare of senior citizens could change a lot.

This week the family owner/operator of several senior citizen facilities testified before the House General Committee about what the wage increase would do to their businesses and their customers:

“If S.23 is enacted, the annual budget impact on our facilities will be:

  • In 2020: $212,641 in the first year (plus payroll taxes and workers’ comp)
  • In 2021: $246,525 for a cumulative impact of $459,167 (plus payroll taxes and workers’ comp)
  • In 2022: $297,769 for a cumulative impact of $756,936 (plus payroll taxes and workers’ comp)
  • In 2023: $363,319 for a cumulative impact of $1,120,255 (plus payroll taxes and workers’ comp)
  • In 2024: $390,080 for a cumulative impact of $1,510,334 (plus payroll taxes and workers’ comp)

Given that these care facilities are subject to state staffing requirements that dictate the number of licensed employees we have per bed, cutting hours or employees to meet the budget is not an option. An additional problem is that Medicare and Medicaid provide a majority of the revenue into the businesses, and these payments are “fixed” and not set to increase at a rate that would cover the wage increase.

So, where’s this money going to come from? The folks who are dependent upon nursing home care — often people living on fixed incomes themselves — or their families. If the legislature decides to cover these costs through increased Medicaid payments, the taxpayer will be on the hook. The other alternative is that these facilities and others like the close, leaving seniors out in the cold.

Rob Roper is president of the Ethan Allen Institute. 

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
Read more...

Latest News

A Response to “Who’s Really Politicizing Our Kids”

June 13, 2019 by Rob Roper The following is in response to a letter that appeared in the Caledonian Record on June 10th by Steven Isham.  To the...

VPIRG’s Plastic Agenda

June 12, 2019 By John McClaughry The plastic bag ban is sitting on Gov. Phil Scott’s desk. If he signs it, Statehouse Chronicle writer Guy Page reports, a working...

The Blittersdorf Special

June 11, 2019 By John McClaughry Remember the Champlain Flyer? That was Howard Dean’s commuter train that ran 13 miles from Charlotte to Burlington. After three years’ operation...

Roll Call! Senate Blocks Amendment to Remove Insurance Innovation from Bill (7-22), 2019

S.131 – AN ACT RELATING TO INSURANCE AND SECURITIES (BARUTH AMENDMENT) FAILED in the State Senate on April 3, 2019 by a vote of  7-22  . Purpose: The Amendment called for removing...

California Prison Drugs

June 7, 2019 By John McClaughry Steven Greenhut, writing in the Orange County (California) Register, makes an interesting point about drugs in prisons. He quotes a San Francisco...

Video