/ FOR MORE INFORMATION
Robin Atwood
Executive Director
40 Rutledge St. • Nashville TN 37210
615-736-6090 ext 203 •

DIRECT SERVICE PROVIDER WAGE CRISIS

  1. WHAT IS AT STAKE?

Thousands of peoplewith intellectual and developmental disabilities in Tennessee arein danger of losing critical support services because those who help them make it through the day – direct care workers – are not being paid competitive wages. These “frontline” workers are worth far more than they are being paid, and it is critical that the state allocate additional funds to provide a fair wage.Otherwise,the quality of care for our state’s most vulnerable citizens and their families- from Johnson City to Memphis - will be seriously jeopardized.

  • Failure to pay fair wages compromises a provider’s ability to retain existing, highly trained and specialized direct care employees, and reduces its capacity to attract new, qualified hires.
  • Many employees have not had pay increases for several years and are living with poverty wages, which ultimately impacts the quality and quantity of staff.
  • At the typical direct service worker pay rate of $8.61 per hourthatthe state pays to providers, an employee working 40 hours per week would earn gross wages of $340. To earn the average Tennessee weekly wage of $874 per week, this worker would have to work (at overtime rate) almost an additional 42 hours.
  • Service providers are facing increased pressure from a growing number of community employers in the same employment pool that are offering more competitive salaries.
  • Tennessee officials say state government is at full employment. Unfortunately,this is not the case for provider agencies. Low wages and high turnover rates have caused an employment crisis where agencies are unable to fill available jobs.
  • Failing to retainspecialized and trained direct care workers will potentially jeopardize and burden the health and safety of intellectually and developmentally disabled Tennesseans and their families.
  • Although the Department of Intellectual and Developmental Disabilities recommended a smallrate increase to address direct worker wages, it was not included in the Governor’s budget.
  • The state’s wages are based on a set rate of$8.61/hour for direct care worker salaries. Service providers are requesting a dollar per hour increase in what the state pays for direct care workers in order to address this urgent need.
  1. DOESN’T THE BUDGET ADDRESS TENNESSEANS WITH DISABILITIES?

Tennessee’s service providersapplaudthe state for allocating funds in the 2016 budget for people with disabilities, but none of those resources – more than $24 million - are directed to Tennesseans with disabilities who are already receiving services, or to direct care workers who are critical to keeping the support network stable. Rather, most of those monies will be directed to thousands of Tennesseans with disabilities who are on a waiting list to receive services. The lives of people with disabilities and their families who currently receive services already are difficult. They will be changed for the worse unless direct care workers are properly compensated.

  • More than8,000 people with intellectual and developmental disabilities in Tennessee rely on an integrated network of support comprised of approximately 20,000 direct care workers to help them through the day.
  • These frontline workers are in every Tennessee county - an average of 211 workers per county.
  • The reasons for someone’s disability are as unique as they are. Therefore, the network of services that providers offer is carefully constructed to meet each client’s needs. Disrupting one facet of care can potentially disrupt all elements in the interdependent network, which enablesdisabled Tennesseans to live, work, remain healthy, and stay safe.
  1. WHY ARE PRIVATE PROVIDERS VITAL?

Funding private service providers isthe most cost-efficient way to supportTennessee’s most vulnerable citizens and invest in a healthy and compassionate society. At a lowercost than state services, private providers help Tennesseans with special needsstay safe and healthy, live with purpose and participate productively in their communities.

  • The state relies almost totally on private service providers to cost-efficiently supportTennesseans with disabilities. The average daily per person cost in a state owned institution is $1,069, while the average daily per person cost in a private intermediate care facility is $447 and the average daily per person cost in the community is $235.
  • Private providers also are responsible for the overwhelming majority of services to people with intellectual and developmental disabilities.
  • Service providers operate under numerous state mandates that help ensure Tennesseans with disabilities have the care options that meet their needs. Providers have to abide by these important but expensive mandates regardless of funding challenges.
  1. WHY CAN’T SERVICE PROVIDERS PROVIDE THE WAGE INCREASE ON THEIR OWN?

Community service providers are faced with myriad funding challenges impacting their operations. The growing inflation rate - over 20% since 2005 - and other regulatory challenges have resulted in higher operating costs and budget deficits. Growing fiscal pressures will compromise the access and quality of care for Tennesseans with intellectual and developmental disabilities.

  • Since 2005, there have been three increases in federal minimum wage rates. These changes have resulted in a more than 35% mandated rise in staff wages.
  • On average, provider staff health insurance costs have risen 46%, with 38% of providers reporting more than 60% increases, and are now absorbing additional costs associated with the Federal government’s Affordable Care Act.
  • Service providers have experienced a 131% increase in technology costs, 52% surge in electricity costs, 47% increase in licensure fees, and significant rises in general liability insurance and maintenance-related costs.
  • Despite these rising operational costs, service providers are unable to raise cost of services because of their dependence on the state’s contract rate.

5. WHY ARE DIRECT CARE WORKERS SO VITAL?

Community providers’ primary concern for operating effectively in light of budget challenges is the ability to retain a critical work force by offering fair wages. Ultimately, the impact made by Tennessee community service providers would be impossible without its frontline workers. Continuity of care depends on a stable workforce. Currently these employees earn just above the federal minimum wage, and are motivated by little more than the commitment to those they serve.

  • Community providers are experiencing an unprecedented high rate of turnover. In a recent survey, service providers reported an average turnover rate of more than 46%. The most common reasons include “can make more money elsewhere,” and “the job is too difficult for the pay.”
  • A wage increasefrom the state will assure the ability of community providers to create a stable environment of efficiency and effectiveness, and continue to provide quality care and support for Tennessee’s most vulnerable population, despite the continuing rise in operational costs and uncertainty about future funding challenges.
  • While the state’s 2016 budget includes no fundsfor a wage increase for direct care workers,a 4% increase is included for state employees. In fact, over the past 10 years, state raises for direct service providers have only increased 1.9% compared to 16% for state employees for doing the same job.
  • A $1/hour rate increase would require an approximate $20 million investment by the state, which would result in $40 million in federal funding. The requested rate increase would mean a 200% return on the state’s investment, and $60 million of desperately-needed funds for communities across the state.