Once upon a time Walmart prices were so low compared to the competition that it drove many smaller operations out of business. Mom-and-pop stores throughout the country would immediately feel the pressure of a new Walmart supercenter opening up within driving distance of their doors. Today, however, most other major companies have caught up, removing the Walmart advantage as far as pricing is concerned. While this may not seem to be directly relevant to home care, it is.
Walmart, Amazon, and just about any other major corporation that provides retail products and services are basically in the same boat these days. As one makes a shift, reduces its prices, or increases wages, so do the others. As Walmart, Amazon, and other companies increase their wages, even for entry level type work at fulfillment centers, it places increased pressure on other types of employers to find and retain quality workers.
That’s part of the problem for some home care agencies and other companies offering these services to clients in need.
As reported by Lehigh Valley’s Business Cycle blog, ‘Walmart Effect’ hampers Lehigh Valley home care companies; employees struggle amid low wages written by Anthony Salamone, staff writer:
“This year, Amazon, which has fulfillment centers in Upper Macungie and Palmer townships, raised the bar on starting pay to $15 an hour. That essentially was catching up with other warehouses, including Walmart, which in recent years have given pay bumps to workers in retail and warehousing.
Meanwhile, data from LVEDC shows home care workers in the Valley earn an average wage of $10.99 an hour. Both in average hourly and annual wages, home health aides rank next to last among the top regional health care occupations, slightly above veterinary assistants and laboratory animal caretakers. Nationally, the average pay for a home care worker is about $22,000 a year, or about $10 an hour, according to the Bureau of Labor Statistics.”
What is often left out from these details involves funding sources. As mentioned in the opening of this article, Walmart once upon a time was able to undercut the prices of almost any competitor. Today, most of its competitors offer basically the same prices or do a price match guarantee.
Plus, even though it may not seem to be the case, prices at Walmart and Amazon have increased. It’s been subtle, but genuine. Those prices could even be at about the same level a mom-and-pop retail business along Main Street would be offering, if they hadn’t been run out of business by the major corporation. The reason? They have to pay for these increased wages, so they get passed onto the consumer.
Home care agencies and other providers simply don’t have the ability to keep raising prices, especially when they heavily rely on Medicaid for reimbursement. The Walmart Effect can certainly make it difficult to attract and retain quality workers, but unless seniors and/or family are willing to pay a lot more for these services to make up the difference where Medicaid stops, it’s unlikely that wages will increase for these valuable workers.