With low pay and minimal benefits, can Minnesota home care workers afford to retire?

Debra Howze was at Jay Spika’s apartment before he woke up. Like she has done for the past 12 years, she helped Spika, who has multiple sclerosis, get ready for the day. She prepared breakfast, then washed bits of egg and grits from the dishes. If there were errands to run, she was ready.

The home care worker is passionate about the job she has done for more than two decades, tearing up at memories of people who couldn’t get in-home aid and had to move into nursing homes. But at 66, she dreams of a retirement she can’t afford.

“I’m going to work until I can’t work no more and somebody takes care of me,” said Howze, who has struggled to save money in the low-paying field.

Retirement benefits are rare for caregivers who help older adults and people with disabilities live in their homes. Personal care assistants (PCAs) like Howze, along with home health aides who assist with medical duties, are Minnesota’s most in-demand professions. That field is projected to have more job openings than any other as baby boomers age over the next decade, according to the Department of Employment and Economic Development.

Despite the demand for their services, PCAs said it is hard to stay afloat in the industry that has historically offered low pay and minimal benefits.

SEIU Healthcare, which represents about 35,000 Minnesota home care workers, is pushing state leaders to offer them retirement benefits. The workers earned a substantial minimum wage increase in their last round of state contract negotiations — from $15.25 to $19 an hour this year, and $20 an hour next year. Whether state leaders will agree to another expensive request remains to be seen.

“The state is exploring options with SEIU on retirement benefits,” Department of Human Services officials said in a statement. “There are very few examples across the country. Washington and Oregon offer retirement benefits; however, Minnesota has differences from those states in how its Medicaid programs are structured.”

The union and Gov. Tim Walz’s administration need to reach a contract agreement by early to mid-January, before the governor proposes his budget. Then state lawmakers need to ratify the deal. With Democrats holding a one-vote lead in the Senate and the House potentially evenly divided, getting legislators on board with major new benefits could be difficult.

“There is no retirement option for home care workers, and there has not been a new retirement program developed at this scale for a very long time,” said Tyler Frank, the SEIU’s lead negotiator for the home care workers. “So it’s going to be a big financial lift and we’re going to need lawmakers to actually approve it and fund it.”

President-elect Donald Trump’s return to office injects further uncertainty into the workers’ push. It remains to be seen whether he would propose cuts to Medicaid, which covers health care services for low-income people and is used to reimburse PCA agencies.

Exactly what a retirement program for the workers could look like — whether it would mean adding people to an existing plan or creating a new program for the workforce — is still being discussed.

DHS officials said costs would depend on how the program is designed, and the state does not have estimates on potential figures.

Home care workers in other states, such as Illinois, have also been pushing for retirement benefits. Washington was at the forefront of the effort and created a first-of-its-kind Secure Retirement Plan for caregivers in 2016.

In Minnesota, the contract under negotiation only applies to a portion of the state’s home care workforce. People getting Medical Assistance, Minnesota’s version of Medicaid, can either opt to be the employer in charge of finding and managing their own PCAs or they can have a PCA agency act as the worker’s employer. Thousands of workers who are employees of an agency, rather than an individual, won’t be affected by contract changes.

Medicaid reimbursement rates from the state to PCA agencies have been too low for companies to offer benefits like retirement or health care, said Kathy Messerli, president of the Minnesota HomeCare Association, a trade group representing home care agencies that employ the workers.

One in five Minnesotans will be 65 or older by 2030 and there will not be enough caregivers to meet their needs, she said, so anything the state can do to bump salaries and benefits to attract more workers is important.

“Right now it’s just not a livable wage,” she said, and home care workers either need a second income or are at the poverty level. “If you add insurance, you add retirement [benefits], it starts to bring that value up a bit for people. So I think it would open the doors for more people to take on those jobs.”

Messerli noted that Minnesota created the Secure Choice Retirement Program, with enrollment starting next year, for private sector employees who aren’t able to save for retirement through a employer-sponsored plan like a 401(k). However, Frank said that program won’t have employer contributions and, given home care workers’ low incomes, they believe a retirement program needs to be “a partnership between workers and the state.”

“There are a lot of people in this work who are making their own sacrifices to provide that level of care and maintain that dignity for all of these invisible people in our society,” Frank said. “They are basically sacrificing their own future to make sure this person can live their day-to-day life right now.”

When Howze started in the field decades ago, she was making $7 an hour. She vividly remembers the vote to unionize home care workers a decade ago and said they’ve seen progress since then, but there remains a long way to go.

The longtime home care worker earns $19.25 or $17 an hour, depending on the program she is providing care under. She also receives Social Security benefits but said those don’t stretch far.

“No matter how much you are hollering or fighting, you are still getting the crumbs,” said Howze, who is Black and noted that many home care workers are women of color. For them, she said, it feels like “society don’t care.”

People doing similar caregiving work at institutions such as hospitals or nursing homes are more likely to get benefits than those serving people in their homes, Howze said. She had a 401(k) when she previously worked as a certified nursing assistant in a nursing home.

Along with allowing people to live more independently, home care workers save the state a lot of money by keeping people out of assisted living facilities, where the cost can be “astronomical,” Spika said.

“There is going to be a shortage of workers,” said Spika, 46, of St. Paul. “How do we convince anybody to care for us when they can make more money and get benefits somewhere else?”