Johns Hopkins University and Johns Hopkins Health System, both based in Baltimore, are boosting their minimum wage to $15 per hour, they said May 6.
The change will take effect July 1, in accordance with annual pay increases for university employees. For health system employees, including more than 300 at Johns Hopkins All Children’s Hospital in St. Petersburg, Fla., the change will take effect Jan. 1.
“Moving to a $15 minimum wage recognizes the hard work and sacrifices Hopkins employees make every day to advance our mission and serve our patients,” Johns Hopkins Health System President Kevin Sowers said in a news release. “We are proud to announce our adoption of a $15 per hour minimum wage even sooner than planned.”
Johns Hopkins said the minimum wage boost includes full-time temporary workers, student workers and contract employees.
Overall, the increase affects more than 6,000 Maryland workers, in addition to the more than 300 Johns Hopkins All Children’s workers in Florida.
Workers at three Tenet Healthcare hospitals in Southern California will hold a rally May 6 to highlight their concerns about staffing, wages and benefits during the COVID-19 pandemic, according to the union that represents them.
The rally comes as the National Union of Healthcare Workers is in negotiations with Dallas-based Tenet for more than 600 direct Tenet employees at Fountain Valley Regional, including respiratory therapists, nursing assistants and X-ray technicians. The union is also in negotiations with the Compass Group, a food and support services provider, for about 225 housekeepers and food service workers at Tenet California hospitals in Fountain Valley, Los Alamitos and Lakewood, who are subcontracted by Tenet and employees of Compass.
Union spokesperson Matt Artz told Becker’s workers contend Tenet has remained profitable during the pandemic, but it did not implement appropriate safety measures. He said Tenet also rejected proposals to better staff certain units, and it has rejected the union’s proposal to stop subcontracting out the housekeepers and food service workers who have struggled to afford healthcare.
The union said Tenet, a major for-profit hospital operator, has the financial means to address these issues. The company reported a $97 million profit in the first quarter of 2021. Tenet stock also recently hit a new 52-week high, according to an April 29 report from Zacks Equity Research.
“These profits are not helping workers or patients,” Christina Rodriguez, a respiratory therapist at Fountain Valley (Calif.) Regional Hospital, said in a May 5 news release. “They’re being made at the expense of patient care and the people who have put their health on the line to help patients during this pandemic. At the height of the surge, I would go home crying that we didn’t have enough staff to help patients struggling to survive.”
Tenet contends the issue is not about Tenet but rather about negotiations between Compass and the union. Tenet said it is focused on staff and patients.
“This matter is not about us. It’s about a negotiation strictly between the NUHW and the Compass Group, which is a vendor that provides a range of food, laundry and other support services to hospitals,” Tenet told Becker’s. “At all times, our main concern is the safety of our staff, the integrity of our facilities and the best possible outcomes for our patients, and we remain hopeful that the NUHW and Compass will reach a positive outcome at the conclusion of their respective negotiations.”
But the union said Tenet can decide whether to bring the subcontracted housekeepers and food service workers in-house, which would benefit them in terms of wages and health benefits.
Meanwhile, Compass said it will continue to negotiate in good faith, with union members.
“Our hardworking team members are at the heart of what we do, and their determination to provide best-in-class care and service is inspiring,” a Compass spokesperson told Becker’s. “We take pride in paying competitive wages and providing affordable benefits and continue to uphold our agreement with the NUHW. We have a long history of listening to our employees, working productively with unions, and will continue to meet and negotiate — always in good faith.”
Respiratory therapists, housekeepers, nursing assistants, medical technicians, dietary workers and others represented by the union said they plan to rally from 11 a.m. to noon May 6 outside Fountain Valley Regional.
The rally, scheduled after Tenet’s shareholders meeting, includes workers from Los Alamitos (Calif.) Medical Center and Lakewood (Calif.) Regional Medical Center. Union workers whose jobs are subcontracted to Compass will speak during the rally, the union said.
Twenty states and dozens of localities increased their minimum wage on Friday, giving a financial boost to many frontline workers during the pandemic.
New Mexico will see the largest jump, adding $1.50 to its hourly minimum and bringing it up to $10.50. Arkansas, California, Illinois and New Jersey will each increase their minimum wages by $1.
Alaska, Maine and South Dakota will increase wages by just 15 cents an hour, while the rate in Minnesota will rise by half that, at 8 cents, to $10.08 an hour.
Additional increases are scheduled for elsewhere this year, with most changes taking effect on July 1.
Low-income earners, like much of the country’s workforce, have seen their wages remain relatively stagnant for decades when inflation is taken into account. Proponents say the new raises will help reduce poverty and offer much-needed pay hikes to some of the most vulnerable workers.
“Minimum wage increases income levels, reduces poverty, so I think it’s pretty clear that it improves conditions in the lower end of the wage distribution,” said Daniel Kuehn a research associate at The Urban Institute.
Localities are also boosting their minimum pay. Flagstaff, Ariz., will see wages rise from $13 an hour to $15, as will Burlingame, Calif.
In some municipalities, the increases are dependent on business size. Hayward, Calif., for example, will follow the same wage hike as Burlingame, but employers who 25 or fewer workers will need to raise wages from $12 an hour to $14.
Varying minimum wages across localities, Kuehn said, lets governments take into account different cost-of-living conditions.
“I think the ideal policy would include a lot of local variation, but that doesn’t mean a federal floor isn’t helpful,” he said.
The federal minimum wage has been stuck at $7.25 since 2009. In recent years, the goal of a $15 minimum wage has become a standard progressive policy.
House Democrats in July 2019 passed a bill that would gradually increase the federal minimum wage to $15 gradually through 2025, but the measure died in the GOP-controlled Senate.
“While families work hard to make ends meet, their cost of living has surged to unsustainable highs, inflation has eaten nearly 20 percent of their wages and the GOP’s special interested agenda has left them behind,” Speaker Nancy Pelosi (D-Calif.) said at the time.
“No one can live with dignity on a $7.25 an hour wage,” she added.
The issue is back in the political spotlight again with Tuesday’s runoff elections in Georgia that will determine which party controls the Senate for the next two years.
The Democratic challengers are arguing that the federal minimum wage will only increase if they win both races.
“If the federal minimum wage kept up with the cost of living, it would be even higher than $15,” Democratic candidate Jon Ossoff said last week. “The basic premise is that anybody in this country working a single full-time job should be bringing home enough money to sustain themselves and then some.”
But critics argue that minimum wage increases could slow job growth by raising labor costs for employers, an issue of particular concern during the fragile recovery from the coronavirus recession.
“A dramatic increase in the minimum wage even in good economic times has been shown to be harmful,” said Michael Saltsman, the managing director for the Employment Policy Institute, a think tank tied to the restaurant and hospitality industry.
“In the current climate, for many employers it could be the final nail in the coffin,” he added.
Saltsman argued that increasing anti-poverty programs such as the Earned Income Tax Credit are better policies than wage increases. The tax credit essentially operates as a government subsidy for low-wage work, shifting the onus of paying the extra wages from businesses to taxpayers.
Kuehn said there is little evidence to suggest that small and gradual increases of the minimum wage have significant effects on employment.
“The minimum wage increase levels we see get passed are not large enough to have significant employment effects,” he said.
But he concedes that it’s harder to predict the effects of a quick nationwide boost toward $15.
“I think it’s important to note that since we’ve never had a federal increase of that magnitude, there’s a lot we don’t know,” he said. “With something of that size, you would worry about low-wage places like Mississippi or Alabama.”
A report from the nonpartisan Congressional Budget Office in 2019 projected that a gradual increase to $15 through 2025 would mean “1.3 million workers who would otherwise be employed would be jobless in an average week in 2025.”
But it also specified a range of possible outcomes, including no job losses on the low end and as many as 3.7 million jobs lost on the high end.
The report found that 27 million people would see higher income, and that the poorest families would have wages rise as much as 5.2 percent.
Researchers such as Kuehn are adamant that businesses can handle increasing wages at moderate levels, even in the midst of a global health crisis.
“It certainly doesn’t make businesses’ lives easier, but businesses aren’t struggling right now because of wage costs,” he said.
“They’re hurting because of the pandemic.”
The Federal Trade Commission is revamping a key tool in its arsenal to police competition across a plethora of industries, a development that could have direct implications for future healthcare deals.
In September, the FTC said it was expanding its retrospective merger program to consider new questions and areas of study that the bureau previously has not researched extensively.
One avenue it will zero in on is labor markets, including workers and their wages, and how mergers may ultimately affect them.
It’s an area that could be ripe for scrutinizing healthcare deals, and the FTC has already begun to use this argument to bolster its case against anticompetitive tie-ups. Prior to this new argument, the antitrust agency — in its legal challenges and research — has primarily focused on how healthcare mergers affect prices.
The retrospective program is hugely important to the FTC as it is a way to examine past mergers and produce research that can be used as evidence in legal challenges to block future anticompetitive deals or even challenge already consummated deals.
“I do suspect that healthcare is a significant concern underlying why they decided to expand this program,” Bill Horton, an attorney with Jones Walker LLP, said.
So far this year, the FTC has tried to block two proposed hospital mergers. The agency sued to stop a proposed tie-up in Philadelphia in February between Jefferson Health and Albert Einstein Healthcare Network.
More recently, the FTC is attempting to bar Methodist Le Boneheur in Memphis from buying two local hospitals from Tenet Health in a $350 million deal.
In both cases, the agency alleges the deals will end the robust competition that exists and harm consumers in the form of higher prices, including steeper insurance premiums, and diminished quality of services.
The agency has long leaned on the price argument (and its evidence) to challenge proposed transactions. However, recent actions signal the FTC will include a new argument: depressed wages, particularly those of nurses.
In a letter to Texas regulators in September, the FTC warned that if the state allowed a health system to acquire its only other competitor in rural West Texas, it would lead to limited wage growth among registered nurses as an already consolidated market compresses further.
As part of its arguments, the FTC pointed to a 2020 study that researched the effects on labor market concentration and worker outcomes.
Last year, the agency sent orders to five health insurance companies and two health systems to provide information so it could further study the affect COPAs, or Certificates of Public Advantage, have on price and quality. The FTC also noted it was planning to study the impact on wages.
FTC turned to review after string of defeats
A number of losses in the 1990s led the agency to conduct a hospital merger retrospective, Chris Garmon, a former economist with the FTC, said. Garmon has helped conduct and author retrospective reviews.
Between 1994 and 2000, there were about 900 hospital mergers by the U.S Department of Justice’s count. The bureau lost all seven of the cases they attempted to litigate in that time period, according to the DOJ.
The defendants in those cases succeeded by employing two types of defenses. The nonprofit hospitals would argue they would not charge higher prices because as nonprofits they had the best interests of the community in mind. Second, hospitals tried to argue that their markets were much larger than the FTC’s definition, and that they compete with hospitals many miles away.
Retrospective studies found evidence that undermined these claims. That’s why the studies are so important, Garmon said.
“It really is to better understand what happens after mergers,” Garmon said. It’s an evaluation exercise, given many transaction occur prospectively or before a deal is consummated. So the reviews help the FTC answer questions like: “Did we get it right? Or did we let any mergers we shouldn’t let through?”
Trinity Health Michigan is raising its minimum wage to $15 per hour for hospital and medical group employees, the organization announced in an Oct. 19 news release.
The wage increase will affect 2,100 full- and part-time employees at Norton Shores-based Mercy Health and Canton-based Saint Joseph Mercy Health System, and their medical groups, IHA, St. Joe’s Medical Group and Mercy Health Physician Partners.
Employees affected by the wage increase include non-union environmental services workers, medical assistants, patient companions, food and retail services and transporters.
Trinity Health Michigan officials said an additional 6,000 employees making between $15 to $19 an hour will also “have their wage adjusted in order to maintain meaningful distinctions in pay.” They said the additional wage increases are to improve pay for a large number of employees, and help retain and attract talented workers.
“Our dedicated and compassionate employees are at the heart of what makes our health ministry remarkable,” Rob Casalou, president and CEO of Trinity Health Michigan, said in a statement. “As we continue to face the COVID pandemic and work together to address economic challenges, we want to recognize our employees whose commitment and talent have enabled us to care for our communities during this challenging time. These investments in our people are part of an overall philosophy to offer equitable and market-competitive pay and benefits for our staff, as together we build a strong future.”
Trinity Health Michigan officials said eligible employees are still slated to receive their annual wage increases for 2020-2021, and no increases are planned in medical health plan premium contributions for employees for 2021. Additionally, they said the base minimum of the employer’s core contributions will climb from $1,200 to $1,400 for calendar year 2021.
Mercy Health and Saint Joseph Mercy Health System are part of Livonia, Mich.-based Trinity Health’s Michigan region. Mercy Health serves the Grand Rapids, Muskegon, Shelby and the Lakeshore communities, and Saint Joseph Mercy Health System has hospitals in Ann Arbor, Chelsea, Howell, Livonia and Pontiac, according to Trinity Health’s website.
Detroit-based Henry Ford Health System said it is investing about $6 million annually to raise its minimum wage to $15 per hour for full-time, part-time and contract employees.
The wage increase will affect more than 3,000 employees, including about 400 union members, as well as environmental services associates, nurse assistants, food services assistants, health screeners and clinic services representatives, according to the six-hospital health system. The increase took effect Oct. 11.
“As a healthcare organization deeply rooted in our communities for more than a century, we know our mission to improve people’s lives extends beyond what we have historically defined as ‘healthcare and healing,'” Wright Lassiter III, president and CEO of Henry Ford Health System, said in a news release. “We have a critical role to play in removing barriers to opportunity and achieving equity for all — and our team members are a crucial part of the communities we all serve.”
Read Henry Ford Health System’s full statement here.