by Katrina Kazda
Fifty By Fifty – Published Nov 17, 2021
Benchmarking survey shows coops offer better jobs, resulting in less turnover
Worker-owned home care cooperatives continue to grow impressively year by year, according to the third annual survey done by the ICA Group, in partnership with the Cooperative Development Foundation. While the first 30 years of home care cooperative development was slow, the past decade has seen a significant uptick, and since 2016, two or more cooperatives have consistently been added to the sector each year, with very few closings. Additionally, six start-up initiatives are currently underway in as many states.
The 2020 Home Care Cooperative Benchmarking Survey [pdf] found that the home care cooperative sector added two new cooperatives—for a total of 14 across 8 states—and 170 new employees in calendar year 2019.
Northwest Cooperative Development Center has played a major role in home care cooperative development, launching 5 of the 14 home care cooperatives in operation today. University of Wisconsin Center for Cooperatives, the California Center for Cooperative Development, Co-op Cincy have also been actively involved in recent start-up projects. Today, new start-ups are being led by El Centro Cooperativo de Desarrollo y Solidaridad (CCDS East Boston), the Sankofa Research Institute, the Southern Pines Land and Housing Trust, and an independent entrepreneur in Louisville, KY. The Keystone Development Center has been partnering with ICA on a multi-year conversion outreach effort in Pennsylvania as well. Finally, early stage home care market and feasibility assessments are underway in Washington, DC; Puerto Rico; and North Carolina.
Co-ops Still Tiny Portion of Home Care Industry
These numbers are encouraging but still represent a tiny percentage of the home care industry. Of the nation’s 2.4 million home care workers, just over 2,600 work in home care cooperatives. Of these, nearly 2,100 work for Cooperative Home Care Associates, a 35-year-old enterprise based in the Bronx. The remaining 13 co-ops are small to micro-sized businesses with only one employing more than 50 caregivers.
In many cases, this is a reflection of the cooperative’s age and pace of growth; in other cases, this is a matter of choice and reflects a desire to remain small in order to foster deep cooperative engagement. In still others it reflects a need for technical support on business strategy and growth, a need identified in the ICA Group’s 2020 Home Care Cooperative Needs Assessment, which was carried out to inform the development of a secondary cooperative that would provide services and supports to help these businesses scale.
Co-ops Provide Better Quality Jobs
Notably, the 2020 benchmarking survey shows that the average rate of ownership among caregiving staff increased 10 percent over calendar year 2018, from 48 to 58 percent. A confluence of factors contributed to this growth, including non-member staff leaving smaller cooperatives while members remained, newer staff being eligible for membership, and a new cooperative being added to the census. Staff at home care cooperatives have the option to purchase an ownership share, generally at a nominal rate and often through payroll deductions, but not all workers choose to do so.
As seen in previous surveys, home care cooperatives also reported an annual caregiver turnover rate nearly half the national average—36 percent versus 64 percent. Importantly, the study revealed that home care cooperatives paid an average of $1.93 more per hour than the $12.58 their non-cooperative agency peers. Hourly wages ranged from $10.50 to $15.26, with a median of $14.00. For an industry plagued by persistent underfunding and a worsening national caregiver shortage crisis, these were important gains, demonstrating once again the leadership and resilience of home care cooperatives.
Change Still Needed
While there is much to celebrate, cooperative leaders and developers alike continue to share frustration with the sector’s inability to substantially move the needle on job quality improvements. The entire industry is structured to keep costs down by exploiting cheap labor disproportionately provided by black and brown women, especially immigrants. For example, Medicaid—the largest payer for home care services—reimburses providers at an average rate of $19 per hour nationally. That hourly rate must cover agency operations and caregiver wages, making it nearly impossible for cooperatives that serve Medicaid beneficiaries to pay living wages ($16.54 for a family of four in 2019) and make investments in caregiver training and other important job quality improvements.
Because Medicaid is such a dominant payer, funding over 70 percent of the home care industry, the prevailing wage in this public program keeps wages low across the industry, even in the private pay market served by the majority of cooperatives (only 3 of the 14 operational cooperatives currently serve public pay clients). While cooperatives in the private pay market can and do raise rates beyond those set by Medicaid, there is a limit to how much individuals and families needing care can pay. Public investment (as is included in the Biden Build Back Better Act) is needed across the board to improve job quality conditions in home care.
Leslie Mead, outgoing executive director of the Cooperative Development Foundation, eloquently explained the challenges facing home care cooperatives at a recent conference:
“The cooperative form of ownership puts the control of the agency with the caregiver. That puts the focus on the caregiver and the quality of their jobs. That makes a big difference in retention . . . but also with [better] retention we can assume that we are getting better care to clients. So, everybody wins when the caregiver is respected, supported, trained, there is a career ladder, and there is an opportunity for a wage . . . that allows a good caregiver to stay as a caregiver. It’s folly to think [however] that co-ops can affect that wage very much; that’s a public policy issue that we all have to be involved with . . . that policy issue has to be elevated among federal and state governments.”
These industry conditions are reflective of the industry’s racist, sexist, and classist roots, which persist today. The majority of home care workers are women of color, many of whom live in poverty and are reliant on public benefits. As mostly small agencies—with 50 or fewer staff—home care cooperatives must work together to break down the systems and barriers that are holding them back from achieving significant job quality gains. Movement is underway to launch a new secondary cooperative of home care cooperatives to do just that. Stay tuned for details.
Author’s Note: In mid-October, shortly after the release of the 2020 Benchmarking Report, The ICA Group launched the 2021 Home Care Cooperative Benchmarking Survey. ICA will be previewing the results at the 6th Annual Home Care Cooperatives Conference in March 2022. To learn more about the surveys or conference visit: https://www.cdf.coop/homecare-cooperative-initiative