December 9, 2023

Health Insurance

Follow Your Health Insurance

Should California pass a $25 minimum wage for health care workers?

California lawmakers have been supportive of signing a bill that raises the minimum wage to $25 an hour for all health care workers.

The bill already passed in the state Senate in June and should be voted on by the Assembly later this month. The idea is there are shortages at hospitals and other residential care centers for very low-paying jobs and this legislation could help.

SEIU United Healthcare Workers West, which supports the bill, said health care employees often are in the worst working conditions, and hospital jobs in kitchen, laundry and maintenance services often pay minimum page.

Critics, such as the California Chamber of Commerce, argue raising the minimum wage for low-skilled jobs would increase insurance premiums and/or reduce the number of health care jobs.

Q: Should California pass a $25 minimum wage for health care workers?

David Ely, San Diego State University

NO: The goal of improving compensation for workers at health care facilities is understandable given their current pay and the challenges in filling positions. But consideration should be given to how health care facilities will respond to this higher expense. Some providers will hire fewer health care workers, resulting in a decline in the quality of care and an increase in workers’ stress. Also, establishing a unique minimum wage for a sector should be avoided.

Ray Major, SANDAG

Not participating this week.

Caroline Freund, UC San Diego School of Global Policy and Strategy

NO: Raising the minimum wage will reduce the number of jobs and increase health care costs. This bill is particularly flawed because it grants the minimum wage according to employer, meaning workers such as cooks or janitors in health care facilities will be paid more than their counterparts in other facilities. The U.S. already spends far more on health care than anywhere else in the world, it is time to look for savings before legislating higher costs.

Haney Hong, San Diego County Taxpayers Assoc.

NO: But not because health care workers don’t deserve it. We need instead to attack the real policies that make life so expensive in San Diego. If we produced instead of opposed housing, for instance, maybe hardworking health care workers wouldn’t be spending more than a third of their income on housing as most do. If we demanded fewer renewables than what we have — the highest in the country by the way — perhaps electricity wouldn’t be as expensive.

Kelly Cunningham, San Diego Institute for Economic Research

NO: Employers will pay more to attract workers for labor abilities when shortages exist at hospitals and other care facilities. The government should not mandate wage rates as determined by demand and supply for labor skills. Interfering disrupts and distorts the need for services produced by functional market demand. Establishing minimum wage rates reduces job opportunities for lower-skilled workers. The way to enhance wages should derive from boosting worker productivity through education, training and improving skills.

Lynn Reaser, economist

Not participating this week.

Phil Blair, Manpower

NO: The demand for health care workers is at an all-time high. But, like any other workforce, supply and demand should drive wages, not strong political lobbying. The health care industry will pay what is necessary to attach and hire quality workers to the field.

Gary London, London Moeder Advisors

YES: Although this is a qualified yes because I am uncertain why those wages have not risen. Either there is an apparent shortage of such workers, or there isn’t, which means that others are willing to step into those jobs. My core philosophy is that paying good wages, whether in health care, construction or manufacturing, is essential to a strong economy. If the state must cement this through legislation, then I lean that way.

Alan Gin, University of San Diego

YES: There is a problem with the labor market in health care. Organizations are having trouble getting workers, yet wages are not rising to increase the supply, as would normally happen if the market was working correctly. Part of the problem is that many facilities are losing money under the current circumstances. If the minimum wage for health care workers is raised, there must be increased funding from the state to compensate providers for the added labor costs that they would incur.

Bob Rauch, R.A. Rauch & Associates

NO: Increasing the minimum wage, even for health care workers only, would benefit some workers but harm others by pricing them out of the labor market. Low-skilled workers that have lower educational attainment would likely be out of work, hurting many of the very workers it is intended to help. Even the Congressional Budget Office has indicated there would be a loss of jobs, a reduction in revenues, and a negative impact on the economy.

James Hamilton, UC San Diego

NO: Wages for health care workers will be going up as a result of fundamental pressures of supply and demand regardless of whether California passes a new law. The question is whether $25 an hour should be mandated for every worker at every institution. A lot of people with very limited budgets are dependent on residential care facilities, dialysis centers and low-cost outpatient services. Under this law, they’ll pay more and receive lower-quality care.

Austin Neudecker, Weave Growth

NO: I support a strong minimum wage but fear setting industry-specific wages represents an overreach. If passed, we would embark on a new era of unrelenting negotiations and lobbying efforts by unions and corporate interests for government legislatures to intervene in private industry labor disputes. Let’s establish a livable wage and, if specific industries have shortages, enable workers to demand increased compensation or leave.

Chris Van Gorder, Scripps Health

NO: I completely support wage increases for our great health care workers. But they must come with funding from government payers and insurance companies that pay for care at hospitals, clinics and other care providers. Otherwise, these increases will create huge challenges for everyone, resulting in program and facility closures because health care providers are already under unprecedented financial distress. Despite political rhetoric, there is no proposed funding to support a wage increase of this magnitude.

Norm Miller, University of San Diego

NO: This proposal is a pandora’s box with the government interfering within specific industries. It does not help nurses or medical professionals, but rather the lower-skilled jobs that exist in, not just health care, but every industry. What about the support jobs at airports, train depots, schools, crop pickers or others that may be viewed as critical to our economy? Minimum wages should be across the board or not at all, within the same local region.

Jamie Moraga, Franklin Revere

NO: Raising the minimum wage to $25 could eliminate health care jobs and detrimentally affect California residents who require health care. Hospitals, health systems, and health care providers are already experiencing financial challenges including climbing labor and operational costs, an unpredictable volume of patients, and ongoing negative impacts due to the pandemic. SB 525 is estimated to create $8 billion in new annual expenses for the CA health care system by 2024. As a result, health insurance premiums and co-pays could increase, and vital health services could be reduced or eliminated, which harms patient care. California legislators shouldn’t dictate industry-specific wage increases.

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