$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

House Passes Global Warming Solutions Act, (105-37), 2020

. H.688 – AN ACT RELATING TO ADDRESSING CLIMATE CHANGE PASSED in the State House of Representatives on February 26, 2020, by a vote of 105-37 Purpose: The...

Roll Call! House Rejects Amendment to Global Warming Solutions Act, (44-99), 2020

. H.688 – AN ACT RELATING TO ADDRESSING CLIMATE CHANGE FAILED in the State House of Representatives on February 20, 2020, by a vote of 44-99 .Purpose: The...

Return of the Thermal Utility – a Tax on Electricity

February 24, 2020 By John McClaughry A push is on in Montpelier to create the thermal utility so long sought by VPIRG. Unlike the version of 13 years...

Amendment Would Eliminate Private Ownership of Real Estate

February 21, 2020 by Rob Roper PR.9 is a proposed amendment to the state Constitution that would essentially and in effect ban the private ownership of real estate...

Roll Call! Senate Overrides Governor’s Veto with $12.55 Minimum Wage, (24-6), 2020

. S.23- AN ACT RELATING TO INCREASING THE MINIMUM WAGE . PASSED in the State Senate on February 13, 2020, by a vote of 24-6 . Purpose: To...

Video