The Oregon Caregiver SPRING/SUMMER 2023 www.ohca.com 16 DATA & RESEARCH Inflation has reached levels unseen in more than 40 years. Meanwhile, it has been more than one year since the Federal Reserve began cutting interest rates in an attempt to drive down inflation. While some inflation is assumed to be a sign of a healthy economy—usually around 2 percent annually—inflation reached a high of 8.2 percent in October 2022, which is far above a healthy annual threshold. Despite the Federal Reserve’s efforts to curb inflation, it remains stubbornly high. Much has been written about the impacts of inflation on wages and other business- related costs across the U.S. economy including the longterm care sector. Given the immense impact of inflation, along with other historic workforce challenges, it is impossible to ignore this important topic. What effect is inflation having on staff working in long term care communities, and how might the day-to-day impacts of inflation be contributing to the wider workforce issues that are taking place across Oregon? Since the COVID-19 pandemic, wage growth has been significant in many parts of Oregon’s economy, including the long term care sector. A recent report from Portland State University’s Institute on Aging showed that the average wage for direct care staff in Oregon’s community-based care settings is $17.40. This is a significant growth since 2020 when the average hourly wage was just above $15.00. Yet, there is little doubt that rising inflation affects an individual’s purchasing power very simply by decreasing the number of goods or services they can purchase. In February of 2023, one would need an additional 16 cents for every dollar earned to have the same purchasing power as in February 2020 according to the U.S. Bureau of Labor Statistics. The way this additional 16 cents per dollar is distributed across the economy is uneven with some areas impacted much more than others. Nevertheless, this makes the goods and services that direct care staff need to live and thrive increasingly more expensive. Perhaps most troubling are food costs, which remain particularly high, increasing by 11.4 percent last year alone, according to the U.S. Department of Agriculture. Rising housing costs are another major concern for many Oregonians. In April of 2023, the median monthly rent for a two-bedroom apartment in Portland was $1,950. In Coos Bay, the cost was $1,600, while in Hermiston it was $1,295. According to the Zillow Home Values Index, the average cost of purchasing a home in Oregon is $474,360. Various Effects of Inflation on Oregon’s Direct Care Workforce By Walt Dawson, D.Phil This number is only an average and the purchase price varies greatly by geographic area. According to Redfin, the median house price in Multnomah County was $499,000, while in Union County it was $222,000. At the same time, Hood River County had a nearly $800,000 average sale price per home. To be fair, these prices all reflect a slight decline from their peak in 2022. However, what remains clear is that housing costs are unaffordable for far too many Oregonians, in particular those working in long term care settings. With inflation cutting into the value of wages, it is increasingly difficult for many Oregonians to thrive. These challenges are real and palpable for direct care staff in the long term care sector. The instability this creates leads to multiple downstream impacts which directly affect the ability to provide quality care to older adults in need of care and support. Policymakers, along with leaders in the long term care service sector, must remain focused on finding ways to shore up the direct care workforce. The need for care and support will only increase in the years ahead. Some interventions will likely take time for their impacts to be fully realized. Understanding inflation’s day-to-day impact on the long term care workforce is essential for determining how best to respond. Walt Dawson is OHCA’s research consultant as well as an assistant professor at Oregon Health & Science University and a senior Atlantic fellow with the Global Brain Health Institute.
RkJQdWJsaXNoZXIy MTY1NDIzOQ==