The Impact of a Large Wage Increase on the Workforce Stability of IHSS Home Care Workers in San Francisco County

Abstract

This study is one of the very few large-scale empirical investigations of the effect of wages on labor market outcomes in any direct care industry, and possibly the only such study
specifically addressing conditions in the homecare industry. It records the impact of the nearly doubling of wages for IHSS homecare workers in San Francisco County over a 52-month period. The project is based on a unique database, which matches approximately 18,000 San Francisco County homecare workers in 26,115 unique matches to 15,500 service recipients between November 1997 and February 2002.

The principle conclusions of the study are that:

• There was a 54 percent increase in the number of IHSS workers over the four-year period of the study.
• Possibly because the wage increase and/or the addition of health benefits made it easier for consumers to hire an acceptable provider, the number of consumers increased by 47 percent over the same period.
• The number of hours worked per provider increased significantly for non-family providers in some ethnic groups.
• The annual turnover rate of matches between consumer and provider fell by 6 percent; adjusted to eliminate the turnover of matches that may end for natural reasons, the annual “bad” turnover rate of matches fell 20 percent.
• The annual turnover rate of the workforce fell 17 percent, but adjusted to measure only “bad turnover,” the rate fell by 30 percent.
• The proportion of consumers matched to a provider of their own ethnicity–which is a measure of the quality of match–rose 6 percent.
• A rough calculation shows the wage increase could have reduced the number of people living below the poverty line in San Francisco by as much as 15 percent, other things being held constant.
• By 2001, the IHSS program was bringing in $114 million in income every year to San Francisco, compared to $37 million in 1997, at a gross cost to the county of $18 million and possibly a net cost of as low as $8 million. That would mean every dollar
  spent by the county brought an additional $13 in income from state and federal sources to very poor San Francisco communities.

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