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A Gray Area 

Governor Stands in the Way of Decent Wages For Health-Care Workers

Wednesday, Oct 6 1999
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L.A. County‘s 75,000 in-home health-care workers provide life-or-death services for the blind and disabled and low-income elderly. They not only cook their meals and clean their rooms but bathe them, give physical therapy, supervise pill taking, and sometimes provide quasi-medical procedures like catheterization. It can involve midnight visits to clinics for cardiac tests or dialysis.

That’s a lot to ask from a minimum-wage worker, but a paltry sum is what almost all these largely minority women, mostly past the age when their own children need daily care, are paid.

The $5.75 hourly wage is half what zookeepers are paid, Frances Gracechild of Resources for Independent Living points out indignantly. Unheard-of for these workers are health insurance, paid vacations or even sick leave. In the absence of these unsung heroines, many aged and disabled people would lose what remains of their independence and be forced into nursing homes or other custodial care -- at considerably greater expense to the taxpayer.

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When in-home providers won a 12-year struggle for union recognition last February, it was an impressive victory for the innovative organizers of the Service Employees International Union (SEIU) over two daunting barriers. One obstacle was sheer logistics: The workers were physically separated -- employed in the homes of 75,000 clients -- and so getting together to discuss common concerns about wages and working conditions was almost impossible. The second barrier was legal and bureaucratic: Although the workers got county paychecks from the Department of Social Services (subsidized by state and federal funds), until 1997 no one would own up to being their employer. The county had insisted for years that they were all independent contractors, and only in the fall of 1997 did our county Board of Supervisors follow the lead of several Bay Area counties in setting up a consumer-dominated Personal Assistant Services Council (PASC) as their employer of record.

Transforming the organizing victory into material gains in wages and benefits, however, has proved no easy task for the workers, partly because the PASC has no funds for wages. Having escaped from the limbo of not having an official employer, the in-home workers still find themselves in a gray area (or a Gray area), where Governor Davis‘ uncertainties about California’s future revenues translate into uncertain wages for these state-stepchild employees.

Davis‘ views are pivotal to their prospects even though the state is not the primary funding source for their wages. Most home-care employees serve the elderly and disabled, and so are underwritten by Medicaid, and 51 percent of their cost is reimbursed by the federal government. The state and counties divide the remaining 49 percent on a 2-to-1 basis, so only about 32 percent of the money comes out of the state Treasury. While federal policy allows reimbursing labor costs up to twice the minimum wage, the state -- under Republican governors -- long refused to kick in dollar one for anything beyond the state’s $5.75 minimum wage. This reimbursement cap meant counties were free (in theory) to give raises over the minimum, but any such icing would have to come wholly out of county coffers. In labor-friendly San Francisco, this allowed a county-funded raise to $9 an hour with medical and dental benefits; for L.A. and almost all other counties, it meant no raise at all.

This Scrooge-like stance was rejected by Sacramento legislators, who in 1997 passed a bill to remove the state‘s cap on reimbursement. The bill passed with unanimous backing from Democrats and substantial support from Republicans who were listening to senior-citizen constituents dependent on home aides. Then-Governor Pete Wilson’s veto of the measure put an end to that year‘s efforts.

However, in the new administration of Gray Davis (whom the SEIU had repeatedly backed heavily in his ascent up the political ladder), union leaders and workers had expectations of great strides forward. But, as the governor unveiled himself as the Great Triangulator for whom moderation meant splitting any differences that could be detected, they were due for disappointment. This year the Assembly -- again with bipartisan support -- passed a new bill (AB 16) to abolish the cap on reimbursement, coupled with a $90 million appropriation to cover Sacramento’s share of raises that urban counties were expected to provide, generally $1 per hour over current rates. The bill also required screening and training for service providers and setting up a registry for consumer convenience.

However, Davis made it known to the Legislature‘s Democratic leaders that commitment to an ongoing $1-an-hour raise was beyond what he found prudent. Budget surpluses in future years could not be anticipated, the governor felt.

What he could live with, Davis told legislators, was a one-time allocation for a raise of 50 cents an hour that would expire after a year. Although this puts counties in the awkward position of having to impose pay cuts or fund the raises all locally when the appropriation expires next July, legislators nonetheless deferred to Davis and shelved AB 16 for this session.

Contrary to the appearance of fiscal vigilance, Davis’ cost cutting is likely to create a large but hidden bill for taxpayers down the road, say experts in health-care finance. In a tight economy, they suggest, poor wages will shrink the pool of competent home-care workers, just when the growing elderly population is creating additional demand for them. As a result, says Gracechild, who also teaches in the School of Health and Human Services at Cal State Sacramento, more and more of the chronically ill and disabled will find themselves forced into nursing homes where government subsidies per person typically cost 30 to 40 percent more than home care.

Union leaders -- SEIU political director Dean Tipps has been meeting with the governor -- are hoping for changes in the governor‘s position. Davis is committed to a review before he makes his budget proposal in January, says Tyrone Freeman of L.A.’s Local 434B, and “We hope he‘ll step up to the plate.”

A Davis staffer said only that “the governor recognizes the need. It’s an ongoing discussion.”

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