The percentage of healthcare organizations with an internal minimum wage of $15 or higher increased significantly over the last year, according to the “2022 Health Care Staff Compensation Survey” from SullivanCotter.
In 2021, less than 30 percent of healthcare organizations had an internal minimum wage of $15 per hour or more; this year, nearly 70 percent do. Some health systems are increasing the internal minimum wage to stay competitive amid staffing shortages and rising inflation. Others are increasing hourly rates as a result of union negotiations.
Health systems reported large increases in overall staff salaries, wages and benefits this year, and many expect to see increases in 2023 as well.
Here is how the internal minimum wage rates changed over the last year:
1. Less than $10 per hour 2021: 2.9 percent 2022: 2.2 percent
2. $10 per hour 2021: 14.7 percent 2022: 5 percent
3. $11 per hour 2021: 13.7 percent 2022: 3.9 percent
4. $12 per hour 2021: 12.7 percent 2022: 7.8 percent
5. $13 per hour 2021: 12.7 percent 2022: 6.1 percent
6. $14 per hour 2021: 14.7 percent 2022: 5.6 percent
7. $15 per hour 2021: 26.5 percent 2022: 53.9 percent
8. More than $15 per hour 2021: 2 percent 2022: 15.6 percent
A hospital industry-backed campaign argues that a new pay hike’s exclusion of public facilities and other provider organizations will lead to an exodus of workers. Proponents of the measure say it will rejuvenate a battered workforce and that the industry is simply looking to protect pandemic profits. (City of Los Angeles and Marqueece Harris-Dawson)
California hospitals have launched a campaign to roll back Los Angeles’ newly enacted $25 per hour minimum wage for many private sector healthcare workers.
The Healthcare Workers Minimum Wage Ordinancewas signed Friday by Los Angeles Mayor Eric Garcetti after the city received a petition for the pay increase organized by the labor group SEIU-United Healthcare Workers West (SEIU-UHW) and signed by more than 145,000 people. Los Angeles’ current minimum wage is $16.04.
The pay bump is set to take effect 31 days after being published by the city clerk, will be adjusted annually for cost of living starting in 2024 and will raise wages for roughly 20,000 healthcare workers across the city, according to the mayor’s office. Those impacted include non-clinical staff, such as food service workers, groundskeepers and maintenance workers, according to the ordinance.
“Working long, grueling hours and absorbing insurmountable stress, the burnout being felt from the pressures of COVID-19 has been prevalent, causing an alarming number of healthcare workers to leave the profession altogether,” Los Angeles Councilmember Curren Price said in a statement. “The approval to raise their wages demonstrates to the countless workers that they are valued, seen, heard and above all, their lives matter.”
The ordinance was opposed by hospitals under the banner of the No on the Unequal Pay Measure Coalition, a campaign sponsored by the California Association of Hospitals and Health Systems.
The group is now seeking enough signatures to put the wage hike in front of Los Angeles voters, which would block the increase from going into effect until a 2024 election yields a verdict. The hospitals-backed push would require nearly 41,000 signatures to be submitted within 30 days.
The coalition paints the Healthcare Workers Minimum Wage Ordinance as an “inequitable, arbitrary and discriminatory” move that would ultimately harm patients and workers.
Because it applies only to certain workers at private hospitals, hospital-based facilities and dialysis clinics, the “vast majority” of Los Angeles healthcare workers are excluded from the measure’s pay increase, the coalition said.
As such, the ordinance will drive a flight of talent from public hospitals and other non-covered facilities such as community health clinics, Planned Parenthood clinics and nursing homes, the group said.
Workforce shortages at these facilities would disproportionately harm the disadvantaged, underserved and uninsured communities whom these facilities more often serve, the coalition said. Service cuts would also be in the cards as provider organizations contend with tens of millions of dollars in increased annual costs, they said.
“We all agree healthcare workers are heroes, but this Unequal Pay Ordinance is deeply flawed, inequitable and will hurt workers and patients,” the coalition said.
The city and proponents of the measure viewed much of the opposition as a push for profits.
In the ordinance’s text, the city highlighted “huge profits in the billions of dollars” and “increasing profit margins” health systems have seen during the pandemic. The city government wrote that “the healthcare industry needs to use some of its profits to fairly compensate workers who are sacrificing every day to care for patients.”
In a release celebrating the ordinance’s signing, SEIU-UHW said healthcare employers “have failed to compensate us for our dedication and sacrifices” and “have more than enough to raise wages.”
The group noted similar wage increase efforts ongoing in eight other California cities as well as a push to bring the $25 minimum to all of the state’s healthcare workers.
In a statement to the Los Angeles Times, SEIU-UHW spokesperson Renée Saldaña said the hospitals “are out of step with local voters if they think the solution is to slash wages for the caregivers who got us through the pandemic. … The problem that needs to be addressed is bloated executive compensation that is driving up healthcare costs for Angelenos.”
George Greene, president and CEO of the Hospital Association of Southern California, told the paper that many of the region’s hospitals are “reeling” financially due to the pandemic. He also said the city passed the ordinance without conducting any type of analysis regarding the impact it would have on the area’s hospitals.
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.
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.
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.
HENRY KOTULA 