Introduction and Context

The COVID-19 pandemic has shined a light on just how essential care workers are to our economy and society. Not only do they care for our loved ones, they also make it possible for others to hold jobs outside the home. A strong, stable, and high-quality care workforce is a critical element of a competitive and inclusive economy in which everyone who wants to work is able.

These jobs make up a significant portion of our workforce. There are currently 2.3 million home care workers (personal care aides, home health aides, and nursing assistants) serving seniors and people with disabilities. More than one million more home care workers will be needed by 2028.¹ There are over 1.1 million child care workers² in the United States.³

Despite the essential nature of their work, both home care workers and child care workers are underpaid and undervalued. Care workers, the vast majority of whom are women and largely women of color, earn low wages and rarely have access to basic benefits like paid sick days or health care. State median wages for home care workers range from $9.05 to $16.66 per hour, with a national median of $13.02.⁴ In 12 states, workers earn $11 or less.⁵ Child care workers continue to earn poverty-level wages, ranging from $8.94 in Mississippi to $15.36 in the District of Columbia, with a median wage of $11.65 per hour across settings.⁶ More than half (53 percent) of child care workers rely on some form of public assistance to get by.⁷ Care workers also face barriers to training and further education, lack viable career advancement opportunities, and often do not have access to a union and collective bargaining power. Poor working conditions not only impact care workers’ well-being and turnover, but also jeopardize their ability to provide high-quality care.

The American Rescue Plan, signed into law in March, included more than $12 billion for Medicaid home and community based services (HCBS) and $39 billion in child care relief funding. But supporting these care workers means more than rescuing them from hardships faced during the pandemic: they need long-term investment to permanently improve compensation and job quality.

In the Biden administration’s American Jobs Plan, released in late March, home care and child care were elevated to the level of infrastructure. The plan includes $400 billion for high-quality, affordable home- and community-based care for people who are aging or disabled. The administration specifically calls for caregivers to receive better compensation and the opportunity to join a union. The plan also calls for $25 billion to help upgrade child care facilities and increase the supply of child care. However, the bulk of Biden’s child care plan is laid out in the American Families Plan, which calls for $225 billion in funding to make child care more affordable, improve the quality of care, and invest in the workforce.

These workers hold up our nation’s fragile care economy, but they are not given the support they need to keep it standing. Care workers have a long history of organizing and unionizing, but the nature of their employment—the fact that they are often independent providers—means they are not protected under federal discrimination and worker protection laws. This report explores effective strategies for organizing home care workers and family child care providers in pursuit of improved wages, benefits, training, and career advancement opportunities. We have chosen to pair these sectors because, as Ai-Jen Poo, the CEO of the National Domestic Workers Alliance, explains, these workers make all other work possible. They are also both funded at least partially by tax dollars, indicating that public policy has a large role to play in determining the working conditions of these workers. Additionally, both sectors of workers have had some success with collective bargaining in recent years but have struggled to expand beyond specific locations or subsets of workers. Our goal is to identify factors driving successful organizing and improved job quality and to offer policy recommendations to build on existing models.

From February to April, New America conducted over 30 interviews with experts, care providers, and union representatives, focusing on three states. This report outlines key considerations for improving care worker job quality through organizing. We also include case studies on care worker organizing in California, Illinois, Washington, and the Cooperative Home Care Associates (CHCA) in New York City, selected based on the effectiveness of organizing strategies in each.

Home care services are paid for using a mix of federal and state funding. Medicaid, which involves a federal-state funding partnership, is the primary source of long-term home care funding for the elderly and individuals with disabilities. Federal Medicare dollars also cover the cost of short-term in-home care.

States decide how to structure their Medicaid service delivery and payment systems. The structure of a state’s home care system could have advantages and drawbacks for both consumers and home care providers. Traditionally, fee-for-service (FFS) models, where state Medicaid offices pay service providers for each covered service a beneficiary receives, have been most common. FFS models are most beneficial to independent home care workers, who see a direct correlation between Medicaid service reimbursement rates and their wages. Yet, FFS models are generally more costly to operate, and some have attributed duplicative or inefficient services for consumers to this structure. While FFS delivery systems still exist, more states have been implementing other service delivery and payment systems with the goal of improving the quality of care, streamlining the consumer experience, reducing spending, and paying for health outcomes instead of services.

Managed care is now the most prevalent structure, with nearly every state operating a comprehensive risk-based managed care and/or primary care case management (PCCM) program.⁸ Through a risk-based managed care system, a state Medicaid agency contracts with managed care organizations (MCOs) to deliver Medicaid and other health benefits for a set payment per person per month, or capitation payment. PCCM is a managed system in which beneficiaries are enrolled with a primary care provider who is paid a small monthly fee to provide case management services in addition to primary care.⁹ FFS payments are still used for some health care and support offered within managed care models, particularly through PCCM.

Many states rely on managed care systems to support consumers that are dually eligible for both Medicaid and Medicare. The managed care model has some advantages, including more incentives built into the system to address holistic and preventative care needs for consumers. However, it does present a profit incentive for providers, involves more administrative costs for home care agencies that must contract with multiple plans, and introduces a lack of funding transparency less present with pure FFS models. For consumers, the managed care model can translate into a more streamlined health care experience and greater access to resources to address holistic care needs, including investments in home care support that prevent more costly and severe medical interventions in the future. Yet some consumers may encounter restrictions on what services are available and where. For home care workers, some managed care providers determine worker compensation, at times with little state oversight or enforcement. This lack of transparency, coupled with a profit incentive on the part of the managed care providers, could eat into workers’ wages.

Increasingly, states have been building home- and community-based long-term services and supports (LTSS) into their managed care models as an alternative to costly institutional care. This trend corresponds with a growing interest from older people and individuals with disabilities in receiving care in the comfort of their own homes. Consumer-directed home care models, through which Medicaid beneficiaries hire a home care worker of their choice, offer consumers more decision-making authority and management of home care services. Yet the amount of support a consumer receives to find a home care worker depends on the state. Workers’ access to training and support depends on the infrastructure in their state or region. Independent home care providers could be more isolated and unsupported, especially if they have no attachment to a union, making it challenging to receive professional development and training aimed at improving the quality of care.

Access to high-quality and reliable child care is essential because it is both a workforce support for parents and an important component of children’s growth and development. Child care costs can take a substantial part of some family's budgets in the United States and the majority of families with young children pay for child care out of pocket. However, over 1.3 million children from families with lower incomes receive assistance through the Child Care and Development Block Grant (CCDBG) each year.¹⁰ CCDBG is the primary source of federal funding to improve child care access. States have significant flexibility in implementation: they set child care subsidy eligibility guidelines, determine which providers are eligible for CCDBG subsidies, and determine reimbursement rates for providers. This report focuses on child care programs that receive public funding.

Our nation’s child care landscape is complex, with a mixed delivery system of center-based programs, family child care homes, and informal care arrangements (FFN, or family, friend, and neighbor care). Providers can be subject to state licensing standards and more recently, quality rating and improvement systems (QRIS) that award ratings to programs that meet a set of defined standards. In many states, providers caring for children receiving subsidies are paid retroactively based on child attendance, rather than enrollment, hindering their ability to plan for and sustain wage increases.

Child care worker earnings usually come from a combination of out-of-pocket parent tuition payments and public funds. Low reimbursement rates for providers accepting CCDBG barely cover the cost of providing care. The quality of care that children receive depends directly on the quality of the workforce. Low wages, minimal benefits, and poor working conditions are major causes of stress for child care workers and impact their mental and physical health. This can inhibit how they engage with children, whose learning depends on the quality of interactions with adults.