Policy Recommendations

This research suggests several routes for improving the working conditions and compensation of care workers. Policymakers at the federal and state levels could consider the following reforms to ensure that care work can become a path to economic security.

1. Increase federal funding for all care workers. Strategies to improve job quality for care workers can only go so far without significant public investment into home care and child care infrastructure. We applaud the Biden administration for calls to dramatically increase funding for home care and child care and recommend that Congress prioritize strong funding for these sectors to ensure the needs of consumers are met and that workers can be paid a family-sustaining wage. These jobs are essential to the public good, and require extensive public investment.

2. Reform federal labor laws to include care workers. Where home care and family child care providers have secured improved conditions correlates with the presence of unions and the right to collectively bargain. Updates to federal labor laws are needed to acknowledge the realities of today’s independent and geographically dispersed care workforce by extending worker protections to independent home care and child care providers, and eliminating barriers to sectoral or industry wide bargaining. Reforms to the National Labor Relations Act, through the PRO Act, would extend the right to unionize and collectively bargain to independent workers, regardless of whether the state is their employer of record.

3. Establish state or county governments as the employers of record for home care and family child care providers in order to facilitate collective bargaining. Public authorities or HCAs provide a policy infrastructure for creating greater consistency in wages for independent home care workers and as the employer of record, serve as an entity with which home care workers can collectively bargain for wages, benefits, and training. Similarly, efforts to establish states, via executive or legislative action, as the employer of record for family child care providers have paved the way for negotiated subsidy increases and health insurance coverage. The federal government could award grants or offer increased HCBS and family child care matching funds to the states to incentivize the establishment of public authorities.

4. Promote higher compensation and greater benefits for home care and child care workers.

• Raise the minimum wage. A $15 federal minimum wage that applies to independent home care providers would go a long way to improve the compensation of workers across the country. In the absence of federal action, however, states and local governments can push their own minimum wage increases.
• Provide increased HCBS matching funds to incentivize wage increases. During the COVID-19 pandemic, states were provided increased Medicaid matching funds, and 18 states, including conservative states like Arkansas and Texas, used these funds to provide increased wages for LTSS workers. This indicates that the federal government could effectively increase wages by providing an additional match if state dollars are used to increase wages.¹
• Explore Medicaid wage pass-throughs. More than half of states have at some point required that a certain amount of Medicaid resources flow directly to care workers. The federal government should explore ways to incentivize states to enact and sustain Medicaid wage pass-throughs.
• Encourage or require states to use a certain percentage of CCDBG funds for workforce compensation. As the largest source of federal funding for child care, CCDBG could serve as a vehicle for improving family child care provider wages if the federal government were to designate a percentage of existing funds or new funding specifically for compensation.² Alternatively, the federal government could create a supplemental payment through CCDBG for providers that is reserved for wage increases.
• Use enrollment instead of attendance to reimburse family child care providers accepting subsidies. While the CCDBG Act already encourages states to reimburse providers based on child enrollment instead of attendance to support the fixed costs of providing services, many states continue to reimburse providers based on the number of days a child attends in a given month. This instability and unpredictability can make it difficult to plan ahead, which can compromise quality. Being able to predict how much money they earn each month allows providers to make more informed decisions around budgeting, staffing, and enrollment. Financial stability could make it possible to increase compensation for staff, likely improving employee retention and well-being. Predictable income also strengthens providers’ applications for loans or grants to expand their business, enhance their facilities, or invest in quality improvement initiatives.

5. Increase access to career pathway opportunities that offer wage gains commensurate with skill gain.

• Invest in care apprenticeships. Apprenticeships combine paid on-the-job training under the supervision of a skilled mentor with coursework to prepare individuals for specific occupations and industry-recognized credentials. Apprenticeship is a particularly important training and employment model for care workers because it helps these individuals pursue postsecondary education at little or no cost, earn progressively higher wages as they build more skills, and obtain mentorship despite the isolated nature of their work. Federal and state policymakers can repurpose existing workforce investments to support the development and delivery of apprenticeships and/or appropriate new funding, such as through the Early Educators Apprenticeship Act.
• Establish minimum and advanced training standards tied to compensation levels. Given their financial stake and concern for residents of all ages, states have a vested interest in ensuring a qualified care workforce. As seen with home care providers in Washington State, establishing minimum training standards and associated compensation levels have the ability to raise the wages of workers while also raising the quality and consistency of care. More states should consider how to leverage their oversight and licensing authority to encourage wage increases tied to skill gain.

6. Support the development of worker cooperatives. There are several strategies at the state and national levels for encouraging the formation of worker cooperatives.

• Provide seed funding/grants to support worker cooperatives. Federal grants to facilitate worker cooperative development—particularly in care occupations—could reduce the significant barrier of accessing startup capital.
• Ease financing requirements for worker cooperatives. It is often difficult for cooperatives to secure business development loans, due to an unconventional business structure. The SBA should consider adopting cooperative loan policies and requirements successfully used by the USDA.
• Offer technical assistance to prospective worker-owners. Federal resources designated for technical assistance in cooperative development could help facilitate additional businesses in the home care space that prioritize reinvestment in workers. The USDA Rural Cooperative Development Grant provides a template for such an investment.³