The Care Economy: Where Does It Stand Today?

Ai-jen Poo, director of the National Domestic Workers Alliance, summarized the care economy as “the work that makes all other work possible.” Care workers, whether paid or unpaid, do crucial work to enable individuals to live with dignity. 

Despite their important work, caretakers are chronically underappreciated, undervalued, and underpaid. This work is largely done by women and women of color. These factors are exacerbating existing wealth disparities and gender pay gaps, while pushing workers out of this field to seek higher pay and better working conditions. 

There is a looming crisis in caretaking, with many organizations already struggling to retain and recruit care worker staff. As demand for caretaking continues to grow in the US, there is already a growing shortage of caregiving professionals that are willing to do this work while maintaining a reasonable quality of life for themselves. 

What is the Care Economy? 

AARP estimated that in 2017, around 41 million family caregivers provided 34 billion hours of care to an adult with limitations in daily activities. The value of their unpaid work amounts to approximately $470 billion. 

In the paid caregiving field, care worker job positions are on track to be some of the fastest growing careers. There are more projected job openings for Home Health Aides in the next decade than any other occupation. 

Caretaking generally includes 2 types of work: direct care and indirect care. Direct care includes direct caretaking activities such as nursing an ill family member or supporting an individual with disabilities. Indirect care includes daily tasks such as cooking or cleaning. 

When speaking about the care economy, we include those who care for family members without being paid, as well as workers who care for individuals through a variety of non-profit and community-based agencies. 

How Does the Current Care Infrastructure Exacerbate Inequality? 

By and large, women perform most of the unpaid and paid care work. People of color, particularly women of color, represent a disproportionate percentage of care professionals in the US. Given care work’s low pay, few benefits, and limited opportunities for advancement, the current care infrastructure exacerbates ongoing systemic inequities. 

When a family member needs care, women are often the ones who leave the workforce in order to care for their family. Between January and December 2020 alone, over 2 million women left the labor force entirely. Beyond the loss in wages and benefits, leaving the workforce produces long-term effects such as giving up promotion opportunities and making it more difficult to rejoin the workforce in the future. 

Women leaving workforce during pandemic, partially due to care work responsibilities.

The care worker field also suffers from high attrition rates. It’s well understood that the quality of care suffers when care professionals are continuously underpaid and overworked. The quality of care directly affects the lives of individuals with disabilities, chronic illnesses, and the aging population. Without access to affordable, high-quality caregivers, some of the most vulnerable populations face the consequences of our current care infrastructure. 

How Is Policy Influencing the Care Economy?

Investments in the infrastructure of this field can help create social safety nets that allow for high-quality care and fair pay for care professionals. Many of these initiatives are up for vote as part of the Build Back Better plan. 

Investments in Home and Community-Based Services

Disability advocates, providers, and individuals with disabilities have long pushed for an expansion in funding for home and community-based services. Access to HCBS is crucial for individuals with disabilities, but states have been plagued with years-long waiting lists and limited funding. As part of the Better Care Better Jobs Act, investments in HCBS would include: 

  • Facilitating statewide planning to improve HCBS infrastructure. 
  • Enhance Medicaid funding for HCBS by providing an increase in federal matching if states expand access to HCBS. 
  • Support quality improvement and measurement of outcomes. 
  • Permanently authorize the Money Follows the Person program to support individuals transitioning from institutions to home and community-based settings. 

American Rescue Plan Act

A COVID relief bill, this act supports family caregivers in particular. The bill increases federal Medicaid funding to states by up to 10%, in order to expand HCBS services. It also expanded the child tax credit to give more money to family caregivers who have children. The bill offers paid leave for federal employees that are taking time off to care for family members. The American Rescue Plan Act could be enhanced with the proposed American Families Plan. 

Paid Family and Medical Leave

The US is one of the few countries who does not guarantee paid family and medical leave. Paid leave would enable workers to receive partial wages during time that they must take off to care for themselves or a loved one. Paid leave could also enable workers to better balance their personal healthcare needs with their jobs, allowing more people to remain a part of the workforce. The American Families Plan could create a national paid family and medical leave program. 

Expanded Early Childhood Care

Affordable, accessible childcare is an important part of the care economy. Many families struggle with finding affordable childcare options. It’s estimated that 51% of families lived in “childcare deserts” even before the pandemic, meaning they live in an area where they are unable to access quality childcare. 

Increased funding for childcare would benefit families who are unable to find quality care, particularly if the parents work non-typical hours and/or have children with disabilities. It would also help boost wages for child care workers and potentially promote the opening of new childcare facilities. 

The Future of the Care Economy

The challenges faced by care workers are not new, but the pandemic and its demands has spurred an increased awareness of how important this work is in sustaining our lives and our overall economy. 

With ongoing debate on the federal level as to whether these initiatives will pass, the future of the care economy is still unclear. But with substantial changes in how we pay for and value the work of caregivers, our country is heading towards a more sustainable future for those who provide and rely on caregiving.