$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

VT Left Wing Media Bias Unmasks Itself

July 24, 2020 By Rob Roper Dave Gram was a long time reporter for the Associated Press, is currently the host of what’s billed on WDEV as a...

Using Guns for Self Defense – 3 Recent Examples

July 24, 2020 By John McClaughry  The Heritage Foundation’s Daily Signal last week published eleven news stories about citizens using a firearm to stop a crime. Here are...

FERC ruling on solar subsidies could help Vermont ratepayers

July 21, 2020 By John McClaughry Last Thursday, the Federal Energy Regulatory Commission finalized its updates to the Public Utility Regulatory Policies Act (PURPA), in what the majority...

The Moderate Left’s Stand for Free Speech

July 17, 2020 By David Flemming Harper’s Magazine, a long-running monthly magazine of literature, politics, culture, finance, and the arts, is hardly what you would call a ‘politically...

Trump’s Regulatory Bill of Rights

July 16, 2020 by John McClaughry “President Trump [last May] issued an executive order entitled  ‘Regulatory Relief to Support Economic Recovery.’ The executive order includes a regulatory bill...

Video