COFAR blog

We think it’s time for a meaningful boost in the minimum wage paid to direct-care workers in the Department of Developmental Services (DDS) system, particularly for those caregivers who are employed by corporate providers to DDS.

We’re suggesting a minimum wage rate for direct care workers of $25 per hour. Right now, the average hourly rate for these workers appears to be $16 or possibly even less. The situation is contributing to staffing shortages throughout the system and a resulting decline in the quality of care in group homes.

We think increasing the minimum wage to $25 is affordable, given that the state has a large projected budget surplus this year. Also, Gov. Baker is proposing a tax cut on capital gains and on inherited estates. We think that money could be used instead to boost direct care worker wages, which are unconscionably low.

At least some of the funding needed for a $25 minimum wage could potentially come from the providers themselves.

In 2019, Sate Auditor Suzanne Bump recognized that at least some of the continually increasing state funding to human services providers could be used to boost direct-care wages, but said that was not happening.

In her 2019 audit , Bump found that the average hourly direct-care wage was $11.92 in Fiscal 2010, and that it had risen only to $14.76 as of Fiscal 2017. That was an increase of only 24% over that eight-year period, an amount that only barely exceeded the yearly inflation rate.

According to Bump’s audit, the increased state funding to the providers provided them with a 237% increase in surplus operating revenues (total operating revenues over total operating expenses) during that same eight-year period.

Residential DDS provider revenues have grown to more than $1.4 billion

DDS corporate residential providers would receive $1.44 billion under Governor Baker’s  proposed state budget for Fiscal Year 2023, which begins in July. If that amount is approved by the Legislature, the provider group homes will have gotten an increase of $563 million, or 64%, since FY 2012, when adjusted for inflation.

That increase doesn’t even appear to include appropriations to a reserve fund (line item 1599-6903) intended to further boost contractual payments by the state to the residential providers. Baker’s Fiscal 2023 budget would increase the size of the provider reserve fund from $79 million to $230 million in the coming fiscal year.

On Jan. 31, I asked the staff of the Legislature’s Children, Families, and Persons with Disabilities Committee whether Senator Adam Gomez or Representative Michael Finn, the committee co-chairs, might comment on a $25 minimum wage for direct care workers. To date, I haven’t received an answer.

Pending bill would eliminate a disparity between state and provider wages

On February 8, I called and emailed Senator Cindy Friedman, Senate Chair of the Health Care Financing Committee, for comment on our proposal.

Friedman has proposed a bill (S.105), which would eliminate a “disparity” in wages between direct care workers working for human service providers and those working in state agencies over a five-year period. The amount of that disparity has apparently only been “guesstimated,” however, and the guesstimate is that the disparity is roughly 20%.

That guesstimate came from a staff member of the Children and Families Committee. If the guesstimate is correct, it appears that even after five years, Friedman’s bill would raise the wage of a worker making $16 an hour to roughly only $19 – a level nowhere near $25.

I haven’t yet heard back from Senator Friedman or her staff.

Friedman’s bill and a companion House bill (H.237) apply to caregivers working in residences overseen by the Executive Offices of Health and Human Services and Elder Affairs, and the Department of Housing and Community Development. The bills would require that the disparity be reduced to 50% as of July 2023, and to zero by July 2027.

Average pay is about $16 per hour

Data on the average wage earned by direct care workers in the DDS system is not easy to find. The federal Bureau of Labor Statistics lists an average hourly wage for “personal care aides” in Massachusetts of $16.29.

Personal care aides, according to the BLS, include workers in both group homes and private homes, and include persons who care for individuals with all types of disabilities, not just intellectual or developmental disabilities.

The BLS does publish data on personal care aides in residential facilities for persons with intellectual and developmental disabilities; but that data is for workers throughout the country, not just in Massachusetts. The average hourly wage in that catetory is $13.49.

Wage disparity amount has not been officially projected

The BLS wage data also do not differentiate between caregivers in state-run versus provider-run facilities.

The amount or amounts of the wage disparity are not specified in Senator Friedman’s legislation either. Her bill requires the agencies involved to provide a report to the Legislature as of next July 1 listing the disparity amount. The agencies must also project the amount of the appropriation needed to achieve those disparity reductions.

No one in a hurry to pass legislation to raise wages

Despite their potentially modest impact, S. 105 and H.237 have failed to make much headway over the past year in the Legislature. Friendman’s bill was referred to the Children and Families Committee in March 2021. It was reported favorably by the committee and sent to the House and Senate Ways and Means Committee only this week (February 7.)

In 2018, Governor Baker did sign legislation to raise the minimum wage of direct-care and other workers to $15 an hour; but it won’t reach that amount until 2023.

Some federal funding to raise wages is due to be distributed next month

Gov. Baker signed legislation in December that would target hundreds of millions of federal economic stimulus dollars for human services workforce retention and recruitment as part of a $4 billion federal and state spending package. But it doesn’t appear that that money would provide for a permanent increase in direct care wages.

Some of the federal money will finally be distributed in the form of $500 checks to an estimated 500,000 low-income, direct-care workers starting in March, the State House News Service reported Tuesday (February 8).

But even when the full amount of the American Rescue Plan Act money is finally distributed, the legislation signed by Baker would set a ceiling of $2,000 on the total amount of funding per worker. A one-time payment of $2,000 will not substitute for a higher minimum wage.

Even so, Shannon Guenette, the executive director of Almadan, Inc., a DDS provider in western Massachusetts, first told us in August 2021 that her agency and other DDS providers throughout the state desperately needed the additional federal funding to retain workers in light of a worsening shortage of direct-care and clinical staff.

But Guenette said on February 1 that her agency’s wage rates would need to be at least $20 to $25 per hour “to hire the staff we need and compete with gas stations and fast-food restaurants. Many of our employees are really struggling with higher rents, higher grocery bills, higher utility costs, and increasing transportation costs,”  she said.