Why underpaying aged care workers is costing Australia dearly
The cost of not paying aged care workers properly is far greater than the sums required to fund a proper workforce.
The substantial increase in pay for aged care workers after the Fair Work Commission’s decision in its work value case for the sector won’t be $3.4 billion a year.
For a start, the FWC is unlikely to accept the union submission for a 25% increase. It’s likely to be substantial, but well short of that. Now that the government has confirmed it will fund whatever the FWC decides, the FWC has a relatively free hand — after all, this is a work value case, so it’s about a fundamental reappraisal of how aged care work should be remunerated, not a minimum wage case or industrial dispute. But the figure is more likely to have a one in front of it than a two.
Second, the FWC is likely to phase in the increase, perhaps over two or three years, and perhaps at different rates for different workers within the sector — starting with those with the highest qualifications, whose retention is crucial.
The cost to government may eventually be several billion a year once the increase is fully rolled out and the aged care workforce begins growing again. Currently it is smaller than it was in 2019.
Which is the thing: focusing on the cost of properly remunerating aged care workers ignores the ongoing cost of not remunerating them properly. In a tight labour market with worker shortages everywhere, plenty of aged care workers have opted to take lower-stress, higher-paid jobs elsewhere, putting further pressure on providers to maintain quality of care and service. In most sectors suffering worker shortages, there’s a high degree of substitutability for the products or services involved. For aged care, there’s limited or no substitutability, especially in regional areas where the closure of an aged care facility means homelessness for residents.
The question is thus about whether we can afford not to remunerate aged care workers properly.
The Coalition clearly thinks we can: one of the few Victorian Liberals left standing, Jane Hume, accused the government of “siding with unions” on aged care remuneration, saying “Labor is taking the side of the union in any claim that is made”.
Hume seemingly hadn’t bothered to make even the most basic effort to inform herself of the case.
It’s not an industrial dispute, as Hume seems to think — unusually, aged care employers and unions are virtually unanimous in arguing workers need a large pay rise.
Nor does she seem to be aware the Commonwealth has a key role in the case because it funds aged care: “The question to answer is whether those wage rises will be passed on to residents; will they be passed on to ordinary Australians about to go into aged care.”
Actually the answer is obvious to anyone with even a nodding acquaintance with the sector: the government funds the sector. While it was in office, the Coalition had begun the overhaul of the funding mechanism in line with recommendations of the aged care royal commission, evidently without Hume having the foggiest idea.
Having humiliated herself completely, Hume then added insult to it all, demanding to know if pay rises would “make a difference to productivity”.
If she’s suggesting that the remaining aged care workforce isn’t working harder than she’s ever worked in her life, day in and day out, to provide a service her own side of politics refused to fund properly, perhaps she should go spend a month looking after senior Australians — and living on an aged care worker’s salary.
It was bad enough that the Coalition soaked its hands in the blood of seniors when it was in government, presiding over the preventable deaths of hundreds of aged care residents. Hume seems determined to add profound stupidity to the Coalition’s record.
This article was first published by Crikey.
