Trendspotting: Immigration and Care for the Elderly

As the first wave of baby boomers reaches retirement age, more families are beginning to confront the question of who will take care of them when they can no longer take care of themselves. For many Americans, the cost of nursing homes and other long-term care is increasingly out of reach, leading some to conclude that cheaper, in-home care may be the solution. According to a recent posting on the U.S. News website, that makes retirees a new stakeholder group in the national debate about immigration reform. (See Immigration Reform: A Key Retirement Issue, by Philip Moeller, U.S. News The Best Life (blog), 11.Feb.2011.)

Why? The reasons may not be immediately obvious. As Moeller explains:

“The shifting outlook has many 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.”

Moeller notes that, historically, immigrants have often taken positions as caregivers, mostly as medical professionals like doctors, nurses, and the like, especially in rural and other underserved areas. Immigrants have likewise filled many of the caregiver positions on the less-skilled and unskilled end of the employment spectrum, Moeller writes. The economic downturn has made the U.S. a less attractive destination for potential immigrant caregivers, he says, noting that labor shortages are likely to make themselves felt only when the economy has fully recovered, and unpaid family caregivers reenter the workforce, creating demand for paid caregivers.

Barry Bluestone, a labor economist at Northeastern University, told Moeller that labor shortages will begin to affect seniors in the not-too-distant future, largely because of demographics, “the big baby boomer generation is being succeeded by the much smaller ‘baby bust’ generation,” and the worker shortage will need to be filled somehow. According to Bluestone, there will be 3.2 million new jobs in healthcare by 2018, and when normal job turnover is factored in, the number of new positions may reach five to six million, which he says will “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, Moeller notes], and an even greater need than that for immigrants at all levels of the healthcare sector.”

Whatever the actual demand for caregivers turns out to be – 3.2 million or up to 6 million – the Bureau of Labor Statistics projects that demand for home health aides and personal and home care aides will rise by 836,700 positions from 2008 to 2018, an increase of nearly 50 percent. (See Home Health Aides and Personal and Home Care Aides, U.S. Bureau of Labor Statistics, PDF, 1.74MB.)

At the low end of the workforce, in terms of skills and qualifications, caregiver jobs generally pay very little, making it hard to attract and retain workers. The Bureau of Labor Statistics notes that home health aide and related positions tend to have hourly wages hovering at or below the $10 mark. Many countries have turned to immigrant labor to meet this demand, which is increasing in countries with aging populations. A recent study by the International Organization for Migration looked at trends in care for the elderly in the United Kingdom, Ireland, Canada, and the United States, finding that:

[M]igrant caregivers already play a substantial role in all four countries and the shift toward older populations, coupled with declining domestic labour supplies, is likely to generate a latent demand for more migrant caregivers. […] [T]his is overall a low-wage sector which, employers report, fails to attract native-born workers because of low wages and unfavorable employment conditions, and our findings suggest issues relating to migrants’ working conditions that need to be addressed. (See The Role of Migrant Care Workers in Ageing Societies, by Sarah Spencer, Susan Martin, Ivy Lynn Bourgeault, Eamon O’Shea, et al., IOM International Organization for Migration, Geneva, 2010, PDF, 1.24MB.)

The caregiver shortage has already hit Germany with a vengeance, according to a recent New York Times article, which notes the difficulty of finding qualified caregivers for nursing homes in expensive major cities like Berlin, where “staff members earn the minimum wage of 8.50 euros, or $11.60 an hour,” and yet must pay big-city prices for rent, food, transportation, and other necessities. (See As Germany Booms, it Faces a Shortage of Workers, by Judy Dempsey, The New York Times, 04.Feb.2011.) Although the German government is easing restrictions on immigrant workers from Eastern Europe, this is not expected to be enough to ease the shortage, the New York Times reports, citing economists who point out that many of the Eastern Europeans who wanted to emigrate have already done so, to countries that kept their borders open, like Britain, Ireland, and Sweden; once settled, they are unlikely to want to leave again.

The lesson? We need to take steps now to align our immigration policies with our predicted labor needs in the near future. Otherwise, we may find ourselves, like Germany, facing labor shortages in key areas that affect our lives and those of our loved ones. As Philip Moeller cautioned in the U.S. News article:

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.

Something to think about.