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COMMENTARY: Raise the Floor for Low Wage Workers

July 10, 2014

Steven Dawson, PHI founder, past president, and strategic advisor, was a guest speaker at the National Fund for Workforce Solutions’ Fourth Annual Meeting held in Chicago from June 17-19.

The theme of this year’s event was “Better Skills, Better Jobs.”

Dawson delivered the following presentation at a breakout session entitled “Raising the Floor”:

I promise to end on a positive note.

However, I want to start off with a harsh reality that I’m afraid we in the workforce community often don’t want to admit: And that is that the vast majority of low-income people in the U.S. will never achieve a middle-class life.

Most will move from one low-paying job to another, or at best patch together several low-paying jobs. That is the best it is going to be. And what we’ve got to acknowledge is that the compelling narrative arc — of the single mom on public assistance who gets to go to a community college, gets a credential, lands a good job and secures a middle-class life — that is an exceptional story. It’s literally the exception. It is a narrative that is inaccessible to most low-income Americans, and it will remain inaccessible even if we were to triple the resources of today’s workforce system.

Don’t get me wrong, career ladder strategies are essential — and my own organization pursues a range of career ladder initiatives in the healthcare sector. But what can the workforce community offer to everyone else — the millions of low-income workers who will continue to churn within low-wage sectors? How do we build ladders and raise the floor?

I do have a few ideas, so let me tell you our story, because I believe the workforce community has in fact a range of options available to raise the floor—to make bad jobs better.

***

Nearly 30 years ago, we wanted to help improve the lives of low-income women in the South Bronx. But we didn’t want to be just a think-tank, we wanted to do something. So we decided to create our own company that would employ low-income women. We would become the employer. We chose the home care industry — hiring aides to care for low-income elders and people living with disabilities — precisely because it provided the opportunity to employ many women. At the beginning we started with 12 home care aides, and if we were lucky we hoped to employ perhaps 200.

On the other hand, we knew that home care jobs were classically bad jobs — minimum wage, part-time, episodic hours, poor training — and so we dedicated ourselves to figure out every way possible to make those bad jobs better.

The first thing we did was structure the company, called Cooperative Home Care Associates (CHCA), as a worker-owned cooperative. We wanted to make sure that the enterprise would always be focused on, and directed by, those who worked there.

We also paid wages higher than the average — though they were only slightly higher — because these jobs are publicly funded jobs (Medicaid and Medicare), and publicly funded home care agencies have very little margin. We were also able to offer health benefits, which was unheard of at the time. Even more importantly, we did everything possible to maximize hours worked per week — to make these jobs as full-time as possible. The result was a paycheck still too small, but still better than the norm.

And we also knew that the quality of the job — as well as the quality of care we were providing our low-income clients — was very dependent on the quality of training. We tried to work with a local community college, but found they could not deliver the quality of training we were looking for, so we started our own entry-level training program, embedded inside the cooperative. We developed what is now a nationally recognized adult learner-centered training model, and guaranteed a job to any trainee who graduated from the program.

As the years unfolded, and the cooperative grew, we learned again and again that while high-quality training was essential, that training is only half of the equation. That’s just the supply side. The other half is what we did as an employer — the demand side of the equation. A well-trained aide alone doesn’t make a bad job good. The employer has to change as well.

So, we started with small things: we created an emergency loan fund that aides facing a crisis could access quickly; we provided a $50 stipend to all worker owners to help them file their taxes, in particular helping them access the enormously valuable EITC and child care tax credits.

And then, we took on longer-term challenges: for example, we recognized the absolutely essential role of the aide’s front-line supervisor — re-training our supervisors to become coaches rather than disciplinarians. And soon learned that those supervisors couldn’t do their jobs well unless the entire organization — from the CEO to the clinical staff — also were trained in the coaching skills of active listening, and problems solving, and communication, and emotional self-management.

Along the way, we made other changes:  We built in a line of peer mentors — former home health aides (the best of the best), who in turn supported trainees and new employees. And to create our own internal career ladder, we promoted as many aides as possible into office positions — assistant trainers, bookkeepers, coordinators — so that now half of our office staff are former home care aides. To stabilize the jobs further, we guaranteed aides with seniority a minimum of 30 hours/week.

Perhaps most important of all, we made sure that in every way possible, the company offered a culture of respect for all front-line workers. For this may be low-wage work, but it is not low-skilled work.

…All of these things put together meant that we achieved a far more stable workforce: In an industry that averages 25 hours/week for aides, CHCA today averages 36/week. In an industry that experiences turnover anywhere from 40 to 60 percent annually, CHCA’s annual turnover is now below 15 percent.

***

But, despite all that we were doing, we knew that it wasn’t enough. If we wanted to make these jobs better, we had to change the rules of the game — change the industry — and since these jobs are paid for primarily by public dollars, we knew we had to pursue not just a practice strategy, but also a public policy/advocacy strategy, both within New York State and nationally. 

That became one of the primary roles of my organization, PHI, which CHCA spun off more than 20 years ago as a separate but closely related nonprofit. PHI now consults to many other home care and nursing home employers — sharing what we are still learning even today by working with CHCA — but we also pursue a range of policy initiatives. 

Yet to take on an entire industry, we needed allies. For example, since New York City’s health care industry is nearly totally unionized, when 1199 started organizing in our part of the home care industry, the CHCA workers voted to join the union. (Life was too simple with just a worker-owned cooperative, so we became a unionized worker-owned cooperative.)

To name just three of PHI’s recent policy victories:

  • With 1199 we successfully advocated for a new minimum wage floor for all Medicaid-funded home care aides in New York State, raising wages and benefits from about $9.25/hour in 2011, to $14.09/hour today — an increase in total hourly compensation of more than 50 percent. This impacted not only CHCA’s workers, but 80,000 other home care aides across the city as well — placing in the pockets of home care aides in wages alone an additional quarter of a billion dollars each year.
  • Second, at the national level, with the National Employment Law Project and others, PHI co-led a successful fight to change federal DOL regulations, guaranteeing for the first time minimum wage and overtime protection nationwide for nearly all home care aides. Amazingly, home care aides have been exempted from the very labor law protections that nearly everyone else enjoys, and the DOL relied almost exclusively on PHI’s research and analysis to extend that protection to 2 million home care aides across the country.
  • Finally, back in New York State, again in collaboration with 1199, we just finished crafting legislation for an “Advanced Aide” role for home care workers allowing for the first time in the state home health aides the right to administer medications — which is part of our own “build ladders” strategy. Gov. Cuomo just included that language in his amended budget, and we expect successful passage in this session.

So today, CHCA is the largest worker cooperative in the U.S., employing 2,200 home care aides, and enrolling more than 600 inner-city women into our employer-based training program annually. According to the independent Benchmarking project, our training outcomes are among the highest in the country: For example, more than 50 percent of the women enrolled in our training program are still employed at CHCA after one year — that’s 50 percent of enrolled, not just 50 percent of placed.

***

I am describing to you this litany of both practice and policy interventions not just to brag, but to dramatize that the workforce community has a toolbox full of tools to raise the floor in low-wage occupations. That “employer engagement” does not just stop at training, but can also mean changing how employers re-structure low-wage jobs and support low-wage workers — either because they want to, or because they are required to, or both.

In this way, we can impact not just thousands, but hundreds of thousands of low-income workers, and not just in home care, but in other sectors as well: as ROC United is doing within the restaurant industry, and others in the hotel and constructions industries.

But to fully pursue this strategy, we have to broaden our definition of success — for success cannot be defined solely as achieving mobility into the middle class. That’s great whenever we can do it. But we must also define success as helping people achieve stability — from an unstable life of making $6K or $10K a year patching together a bunch of part-time jobs, living doubled up, surviving on charity and friends, to a more stable life of making $18K or $20K, with health benefits, with access to EITC — in a decent job where you are trained well, supervised well, and where you and your work are respected.

$20K a year is still too little. And it is certainly not a middle-class job. But stability is fundamentally what most low-income people do not have in their lives, and yet it is something that even a relatively low-wage sector, when thoughtfully re-structured, can deliver for hundreds of thousands of low-income Americans.

So, should we build ladders? Yes. Can we raise the floor? Absolutely. We must do both.

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