Health & Wellbeing

To Fix the Care Economy, the United States Should Look Internationally

To Fix the Care Economy, the United States Should Look Internationally
View 1 Image

Author: Diana Elliott, - a nonpartisan research organization focused on improving the health and well-being of people globally through evidence-based policies and practices.

The care economy and the role of caregiving in unpaid and paid work have been in the spotlight recently in the United States. In 2021, the proposed Build Back Better plan would have invested $400 billion in the care economy—including long-term care services under Medicaid, paid family and medical leave, and better pay for home and child care workers—but failed to pass after some legislators equated it with socialism. A recent executive order that integrates more supportive caregiving policies into federal government spending has largely skirted political debate, but it impacts a narrower slice of the population.

Why does the care economy matter? For one, the United States is aging but doesn’t have the care workers it needs—nursing home employees, home health aides—to support a growing population of older Americans. For another, child care shortages and costs are making it harder for people to participate in the workforce. Put simply, a healthy economy is dependent on a functioning care work system. On this World Population Day, we’re examining the state of the care economy in the United States—and looking abroad for ways to strengthen it.

Where does the U.S. care economy stand?

The United States’ lack of investment in the care economy may seem surprising to its international peers. The work that family members do for young and old alike is supported in many wealthy countries by government investments. Among 38 OECD countries, U.S. spending on family investments—including child credits, child care support, paid leave, and payments to sole parents—was just 0.7% of GDP in 2021, just above Turkey (0.5%) and Mexico (0.6%), and well below the OECD average (2.1%). The United States is often ranked as one of the least child- and family-friendly wealthy countries in the world, and today sits at the bottom of the list with Bulgaria and Chile.

Such disinvestments shine a spotlight on how devalued care work is in the United States. Demographics may play a role; women are overrepresented in unpaid and paid care roles. In 2019, 95% of early childhood education workers in the United States were women and were paid, on average, $14.22 an hour in 2022. Occupations where women predominate, like care work, pay lower wages than other occupations and because of the personal nature of the work may be viewed as less valuable than other jobs. Further, women’s unpaid caregiving is costly; American mothers lose an estimated average of $237,000 over their lifetimes in foregone paid work to provide family care.

The care economy will be increasingly important in an aging society

Long-term demographic change in the United States suggests the care economy should be a higher-priority investment. In 2020, 55.8 million Americans were ages 65 and older, a growth rate of 38.6% over the last decade, and 41.8 million adults were informal caregivers to those ages 50 and older. Caregiving to older adults will only increase over time as America continues to age.

Meanwhile, there is a shortage of home health and personal care workers—those who often care for older people—with no resolution in sight. Such workers in 2021 had median pay of $14.15 an hour, and despite a current shortage of workers, demand is anticipated to grow 25% in the next decade. The churn in such roles was high—even before the pandemic—with over 30% of home health nurses leaving their job every year.

It is estimated that 38% of home health and 25% of personal care aides in the United States are immigrant workers, suggesting that much of the future labor supply will depend upon immigration policies changing in the next decade. Even with recent proposals to boost immigration, the United States is working against declines in immigration from the pandemic and the previous administration’s restrictive policies. The prospects for more home health and personal care workers in the country are discouraging at present.

Though pronounced in the United States, the care-work crunch is not limited to the country and is emerging as a global challenge. Combined, OECD countries will need a projected 13.5 million long-term care workers  by 2040 to keep up with the demands of their aging populations. Globally, there are shortages in the overall health workforce projected through at least 2030, and Africa, the Eastern Mediterranean, and the Middle East will face the biggest gaps. In part, this is because wealthier countries are recruiting health professionals to keep up with demand.

What lessons can the United States learn from other countries?

Low fertility, long life expectancy, and restricted immigration have made Japan “the world’s policy laboratory” as it grapples with an aging and shrinking population and the caregiving and fiscal constraints that come with it. It is the oldest country, with 30% of its population ages 65 and older.

To care for its older population, Japan has introduced a long-term care insurance system, community-based integrated health, and even robots as solutions. But care work, for now, requires a workforce, and a future workforce depends on fertility. Japan is planning to boost child care spending, encourage parental leave, and incentivize young families to move to rural areas, hoping to encourage people to have children and ease care burdens on young families.

Countries in the European Union are also aging and watching Japan closely. One proposed solution is to embrace more refugees and migrants, which would also boost the region’s younger and working-age populations. This year the United Kingdom for the first time created 60,000 migrant visas for social care workers to staff care homes or to provide domiciliary care to people in their homes – a partial solution to filling 150,000 vacant positions. Though migration policies around the health workforce must be carefully managed so that they don’t exacerbate pre-existing inequalities between countries, the World Health Organization cautions.

The United States has been slow to embrace viable and long-term solutions to the care economy challenges that its international peers have adopted. Given the shortages of care workers and the aging population, the country will need a more dedicated strategy to support the needs of the young and old alike, as well as their paid and unpaid caregivers. The success of the overall economy—not simply the care economy—depends on it.

Editor's note: This article was originally published on PRB and is republished here with permission. Read the original article.

Some countries also promote consumer spending rather than consumer "saving for old age", especially among the lower spectrum of wealth, leading to inability to afford care in old age. Are the rich, influential people going to support taxes going to support people who no longer have the ability to work and spend? It will probably be easier to convince those rich influential people to invest in robotics for elderly care, since there will be a big market ... except that that doesn't solve the problem of people who don't have the savings to pay for robots.
Stop the food companies from pumping sugar into everything, stop the pharma companies from manipulating their drug data, and provide a framework for regulating natural compounds and supplements in a meaningful way. We need a health care system that rewards health not profits!
akarp is 100% correct.

Socialist, central government control is not the answer. However, corrupt central government agency (via it's agencies) is certainly NOT the answer either.

The current "health care system" (more appropriately a "health care economy) is broken because of manipulation of government agency and manipulation of markets. There is no direct relationship between the buyer (patient) and the seller (doctor/hospital)... this is *COMPLETELY BROKEN*.. The problem is not "private healthcare" rather it's corrupted healthcare that it is real problem. The FDA is a revolving door with big pharma and "insurance".. The DC lobby ecosystem is 100% corrupted and corrupting.

Socializing heath care won't work in America any better than the broken/corrupted services "market" already is.

Pharma middlemen (benefit managers, wholesalers, etc) completely break the system. Additionally, because of the corrupted mechanisms here in America, we (Americans) are burdened with paying for the lion's share of drug development for THE WORLD... kinda like how America is expected to be the World's Police. I don't know if the NewAtlas folks allow links in here, but to get a really good idea of the problem, look at the diagram on the nopatientleftbehind dot org website and search for "pbms the secretive middlemen for insurance and drug companies"; it graphically shows the fundamental break that has *in essence* led to the broken and expensive system we have today.
(NOTE: if allowed, it is here:
Stop subsidizing sugar, tobacco, and Big Pharma's fake products, FDA, and listen to Akarp.