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The number of people working in nursing homes is down. So who takes care of elders?


The elder care industry is in a bind. The number of people working in nursing homes since the start of the pandemic has decreased 15%. Normally, employers would increase wages or offer bonuses, but for elder care providers, it's not that simple. Adrian Ma and Darian Woods from our daily economics podcast The Indicator explain why some economists believe immigration could help.

ADRIAN MA, BYLINE: For more than four decades, Frank Romano and his family have been running various eldercare services in Massachusetts; think nursing homes, assisted living, home care. In a good year, he says, their profit margin is maybe 2- or 3%. But last year was not good.

FRANK ROMANO: We do not have enough revenue to cover our costs. Last year, 2021, was the worst year financially for our little private company in 45 years of running it, and it all had to do with labor costs.

MA: Nurse assistants, he used to pay 14 bucks an hour. Now, he pays 20. He's raised wages also for other support staff. But he says it's still not enough to keep a lot of people from leaving for better paying, possibly less-stressful jobs.

One of the big reasons he says they can't compete is because so much of their revenue depends on Medicaid. That's the state and federal insurance program for people on a low income. Frank says Medicaid reimbursements haven't kept up with his actual labor costs, so raising those reimbursements would be a huge help.

DARIAN WOODS, BYLINE: And yet that would still not solve another fundamental problem facing the eldercare industry - the supply of workers that is needed.

DELIA FURTADO: Maybe another option is to just have a more open immigration policy.

MA: That's University of Connecticut economist Delia Furtado. Delia says when the labor pool is evaporating, immigration is one way to fill it back up. And Delia says that could be accomplished by issuing more employment-based visas for people who want to work here as nurses.

WOODS: But also Delia says that the U.S. should just increase immigration overall. After analyzing years' worth of data on U.S. nursing homes, she believes that this could actually improve eldercare services.

FURTADO: It's very clear that nursing homes located in areas with lots of immigrants have better quality care measures.

MA: In other words, Delia found when immigrants move to an area, patients living in nursing homes in those areas were less likely to have a bad fall or develop complications like urinary tract infections or even be restrained, you know, like, be strapped to their beds, which can be a sign of an understaffed nursing facility.

What do you think is going on there?

FURTADO: OK, so the short answer is I'm not sure exactly.

MA: But she has some theories, and one of them is nursing home jobs are just hard to fill because, well, as you can imagine, a lot of them are stressful and labor intensive. They often don't pay super well. And Delia says perhaps when more immigrants move to an area, there are more people willing to take those jobs, which means nursing homes are better staffed.

WOODS: Another possibility Delia has considered might have a little bit more to do with culture than economics. She says that some immigrants who take these jobs maybe come from cultures where older folks generally get more respect, and maybe that translates into better care.

FURTADO: If we don't have enough workers that are willing and able to do this very difficult and, I would argue, very important job, then we're really letting down the elderly population, the elderly and disabled.

MA: And with baby boomers getting older, with people living longer, that population is only going to get bigger and bigger for decades to come.

WOODS: Darian Woods.

MA: Adrian Ma, NPR News. Transcript provided by NPR, Copyright NPR.

Adrian Ma
Adrian Ma covers work, money and other "business-ish" for NPR's daily economics podcast The Indicator from Planet Money.
Darian Woods is a reporter and producer for The Indicator from Planet Money. He blends economics, journalism, and an ear for audio to tell stories that explain the global economy. He's reported on the time the world got together and solved a climate crisis, vaccine intellectual property explained through cake baking, and how Kit Kat bars reveal hidden economic forces.