Did Minimum Wage Policy Changes Impact Home Health Workforce?

Abstract

The shortage of home health aides has been exacerbated in recent years partially because of low wages. Minimum wage (MW) policy changes may alleviate this workforce shortage. This study examined the effects of MW policies on wages and employment of home health aides. We performed a county-level longitudinal analysis using 2012 to 2018 national data. The study cohort included 2,496 counties and focused on all workers in the home health industry. Outcome variables included wages and the employment of home health aides. Key variables of interest included the consumer price index adjusted state MW and a set of variables that captured the effect of the Fair Labor Standards Act (FLSA) extension. This study found that home health aides' hourly wages were $1.00 higher (p = .011) in states that increased their MWs from below $8 to above $10. The FLSA extension was associated with $1.15 higher wages in states with higher MWs (i.e., state MW above $10 in 2014). The FLSA extension was associated with higher employment of home health aides in less-competitive markets, rather than high- or average-competitive markets. This study suggests that state MW increases combined with the FLSA extension may help maintain the current home health workforce and improve their wages.