Immigration Reform: A Key Retirement Issue

Surging demand for caregivers will bring labor shortages if supply of immigrant workers is squeezed.

By SHARE

With Social Security and Medicare programs facing deficit-cutting proposals in the new Congress, seniors and their advocacy groups already have big issues on their plates. Yet a good case can be made that immigration reform is another emerging issue for millions of seniors who need care. The shifting outlook has several components—rising demand for care due to a growing elderly population, a sustained effort to provide elder care in homes rather than institutions, a shrinking work force of Americans, and an economic recovery that will eventually reduce the supply of family members available to provide unpaid care.

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Historically, many paid caregiving jobs have been filled by immigrants. Immigrants who are physicians and other skilled medical workers are particularly important in rural and underserved U.S. markets. The demand for less skilled in-home care aides also has been filled in part by immigrants, although precise data could not be obtained. The U.S. Bureau of Labor Statistics does not ask immigration status in its research, and does not track caregivers as a separate job category. It does measure "nursing, psychiatric, and home health aides," and says that in 2009 there were about two million people in this category. Nearly 90 percent were women, 34 percent were black or African American, and more than 12 percent were Latino or Hispanic. There are another 955,000 "personal and home care aides," of whom 85 percent were women, 21 percent black or African-American, and 19 percent Latino or Hispanic.

Julie Northcutt, CEO of Caregiverlist.com, notes that home-care agencies, nursing homes, and other senior care providers may only hire legal residents and should be screening all work applicants. "In senior caregiving, because of the insurance coverages you must have and the licensing requirements, companies only hire people who are verified as legal to work," says Northcutt, whose company provides seniors with care information and access to paid care resources.

In recent years, the numbers of new immigrants have declined. Stiffer enforcement of immigration laws has reduced the flow of illegal immigrants. Meanwhile, the recession has curtailed new job opportunities and made the United States less attractive to legal immigrants. Labor markets are currently so weak that the reduced supply of immigrants is not creating labor shortages. But as more older people require care and the economy continues recovering, it will become harder to find even low-skilled people to provide in-home care.

The recession also has placed even more demands on unpaid family caregivers, according to Caring.com, which provides support services for family care. It says that some 43 million people now provide unpaid family care in the United States and that the recession has taken a big financial and economic toll on them. According to a recent Caring.com survey, "42 percent are spending more than $5,000 a year on caring and over 60 percent are concerned about the impact that providing care is having on their savings." A 2009 study done for the National Alliance of Caregiving, in collaboration with AARP, found that there were more than 65 million unpaid caregivers, or 30 percent of all U.S. adults, and that they provided an average of 20 hours of care a week. About 70 percent provided care to someone over the age of 50.

As the economy recovers and job opportunities reappear, many unemployed family caregivers will return to work, and the demand for paid caregivers will rise. In-home care has continued to be far cheaper than costs for nursing homes, assisted living facilities, and even part-day adult day care. Still, the cost of in-home care last spring averaged $18 to $19 an hour, with wide price variations, according to Genworth Financial's 2010 Cost of Care survey. The BLS occupational profile for home health aides lists a median salary of just under $10 an hour.

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Worker shortages loom. "Our real problem is going to be finding enough people to fill the jobs we have, and not the other way around," says Barry Bluestone, a labor expert at Northeastern University in Boston who heads the Dukakis Center for Urban and Regional Policy there. Bluestone has researched the future employment landscape for seniors, and is doing research now on healthcare employment trends.

Controlling runaway costs and handling the exploding demand for healthcare from an aging society, Bluestone says, will require nothing less than reinventing the healthcare delivery system. This will require new skills and create many new jobs. "Some of those are going to be people who become quite adept at electronic [medical] records," he says. "We will have patient advocates who will help people navigate the system more effectively. There will be more non-professionals who, for example, will help patients to take their medications. So there will be all kinds of patient coaches, and patient advocates, and patient partners."

The good news for seniors, Bluestone says, is that many of them will be able to fill these new health jobs. But even with more older people staying in the workforce, he projects substantial future labor shortages as the economy recovers. The main reason is demographics—the big baby boomer generation is being succeeded by the much smaller "baby bust" generation.

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By 2018, his projections show the need for 3.2 million net new jobs in healthcare. Including normal turnover, he says, the actual number of new job openings will be closer to five million and possibly six million. "So we will have millions and millions of new jobs in the healthcare sector," Bluestone says. "That's going to provide ample job opportunities for encore jobs for baby boomers, and new gateway jobs [for younger workers trained to fill new types of healthcare jobs], and an even greater need than that for immigrants at all levels of the healthcare sector."

As a cautionary tale, Bluestone points to Japan as a society that does not encourage immigration and is aging at an even faster rate than the United States. "They have enormous costs of retirees that they don't know how they're going to meet," he says. "They also don't have replacements for their workers." He says the lack of immigrants in Japan has contributed to "a permanent recession for 20 years."

Twitter: @PhilMoeller

Corrected 2/22/11: An earlier version of this story incorrectly identified Caregiverlist.com.