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How Minnesota could solve coming home-care worker shortage

There are several steps we must take to professionalize the industry, raise wages and provide better benefits.

Minnesota must address its coming home health-care worker shortage in order to avoid forcing older Minnesotans and people with disabilities into nursing homes.
REUTERS/Jessica Rinaldi

Minnesota is projecting a shortage of as many as 53,000 home health-care workers by the end of this decade. In order to avoid forcing older Minnesotans and people with disabilities into nursing homes because of this shortage, there are several steps we must take to professionalize the industry, raise wages and provide better benefits.

Lee Egerstrom

Two models that can work in tandem involve unionizing home-care workers, which is currently under way, and forming worker-owned cooperatives.

Changing demographics with aging populations in many communities, especially in rural areas, should be a driving force for little-used worker co-op development, said Margaret Bau, a USDA Rural Development co-op specialist in Wisconsin.

An underutilized tool

Despite the need for creative developments, and despite Upper Midwest experience with cooperatives and related mutual insurances and credit unions, worker-owned enterprises remain an underutilized tool for development, said Kevin Edberg, director of Cooperative Development Services in St. Paul.

Bau and Edberg were among co-op developers, financiers and community organizers participating in a Cooperatives = Community Development conference in Minneapolis. Minnesota and Wisconsin are leading states in co-op development, various speakers noted, but there has been less success with workers owning and operating their own businesses.

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One major area for potential development is the growing need for home health-care services. A leading co-op model is Cooperative Care based at Wautoma, Wis., where 60 home care workers provide services for about 150 clients in Waushara, Winnebago, Green Lake, Adams, Fond du Lac and Marquette counties.

Tracy Dudzinski, who describes herself cooperatively as “a caregiver, administrative coordinator, and the board chair,” said Cooperative Care is owned by 40 of the caregiver members while 20 caregivers are employees. Together, they supply workers in categories of home health care, personal care and certified nursing assistants.

Already a shortage in central Wisconsin

The anticipated shortfall of caregivers in Minnesota “is already here (central Wisconsin),” she said. “We have trouble meeting needs for our services, and we’re paying a lot of overtime.”

These needs are expected to increase. Gail MacInnes and Dorie Seavey, in a 2012 Paraprofessional Healthcare Institute (PHI) study, projected a 53,000 shortfall of Minnesota home care workers by the end of this decade.

Their report, “Home Care at a Crossroads: Minnesota’s Impending Long-Term Care Gap,” attributes some of the gap to the aging population. But other factors plague the industry — not the least of being the lack of compensation and benefits. This means home-care workers can’t adequately care for their families while caring for other people.

Minnesotans over age 65 are expected to increase from 670,429 in 2010 to more than 1,193,100 in 2030 – an 80 percent increase, according to U.S. Administration on Aging projections in the report.

Need is growing, but pool is declining

The authors cited Minnesota Department of Employment and Economic Development (DEED) estimates that an additional 53,224 direct-care workers would be needed between 2010 and 2020, while the number of women between ages 25 and 54 – the core pool for these workers, is projected to decline by about 2,000 in this decade.

Direct-care workers include home-health aides and personal-care aides who account for 72 percent of all workers in the sector. Different nursing aides, orderlies and attendants account for the other positions.

At the same time, personal-care aides and home-health aides are projected to be the two fastest growing occupations in the current decade, with increases of 62 percent and 54 percent (27,579 jobs and 20,594 jobs) by 2020. Overall Minnesota job growth is projected at 13 percent.

What home health care represents in Minnesota is a neglected growth service industry. Two public policy events of the past year should help.

A new state law

For starters, the Minnesota Legislature passed a law earlier this year allowing health-care workers the right to vote for unionization, which would provide collective bargaining rights. Rules and regulations are being adjusted for the change, and elections are anticipated by next spring.

Secondly, President Obama approved rules on Sept. 16 extending federal minimum-wage protection and overtime pay for home-health-care workers who help elderly and disabled. The rule changes affected an estimated 2 million workers nationally.

“Home care workers are no longer treated like teenage babysitters performing casual employment under this final rule,” the Associated Press quoted Labor Secretary Thomas Perez as saying. Babysitters and home care workers were exempted from the federal minimum wage law in 1974.

Despite the predictable claims such a boost will ruin the industry and force elderly and disabled to move into institutional care facilities, the Labor Department said the median wage for home care workers is $9.70 per hour – well above the current $7.25 per hour federal minimum wage. But that still means at least half the industry’s workers are paid less than the median, and untold thousands are making less than the minimum wage.

A SEIU spokesman in Minnesota said the federal minimum wage coverage is mostly “a correction” of an oversight from the 1970s.

Not ‘either-or situations’

At the same time, building sustainable home-health-care systems aren’t “either-or situations” between collective bargaining and co-op development, said Wisconsin’s Bau. Both are important for attracting  newcomers and keeping current caregivers in these important jobs. Throughout Europe, many cooperative enterprises are highly unionized.

Benefits that Cooperative Care achieved are like union contracts. Owner-member-workers qualify as a pool for negotiating health care benefits, meaning health care workers can afford health care for their own families; and being employees of a company they also own, rather than freelance care providers, they have predictable employment that qualify them for home mortgages.

Minnesota may still face a shortage of home care providers, but there are tools to help these workers care for their families while they care for others.

Lee Egerstrom is an Economic Development Fellow at Minnesota 2020, a nonpartisan, progressive think tank based in St. Paul. This commentary originally appeared on its website.


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