Why Immigration Reform Is a Big Senior Issue

The economic recovery will reveal shortages of senior caregivers; immigrants could close the gap.


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 workforce of Americans, and an economic recovery that will eventually reduce the supply of family members available to provide unpaid care.

Visa and passport
Visa and passport

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.

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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.

Since 2008, she notes, the caregiving industry has grown 40 percent, adding more than 2,000 caregiving locations throughout the country, including 1,250 franchised outlets. Healthcare companies have moved into caregiving as well, a trend she expects to accelerate because of Obamacare. "With accountability becoming a factor in the new healthcare law, the hospitals are going to want to be more connected to what happens to a patient after discharge," she says, "which means more professionally managed senior home care."

In recent years, the number of new immigrants has declined. The tough economy has reduced demand to find work in the United States, and stiffer enforcement of immigration laws has further reduced the flow of illegal immigrants. 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.

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The recovery will also enable unemployed family caregivers to 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 2012 Cost of Care survey. The caregiving industry says its average pay is closer to $10 to $12 an hour. The gap consists of fees to caregiving firms and higher pay rates to skilled caregivers, who often work for healthcare providers and not caregiving agencies.

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. 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."

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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.

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."