Fueling Prosperity: The Positive Economic Ripple Effects of Increasing Wages for Nebraska’s Direct Care Workforce
NASP contracted with the nationally recognized and highly respected economist, Ernie Goss and Associates, to conduct an economic impact study of Home and Community-Based Services (HCBS) for individuals with intellectual and developmental disabilities (IDD) in Nebraska.
Here is a link to the full study: Fueling Prosperity: The Positive Economic Ripple Effects of Increasing Wages for Nebraska’s Direct Care Workforce
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For every dollar invested in HCBS IDD services, Nebraska taxpayers see a positive rate of return of $1.14 in state dollars. That rises to $1.40 once the federal match is factored in.
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Top three industries experiencing positive impacts of increasing wages for Direct Support Professionals:
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Business support services at $128.3 million;
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Home health care services at $103.6 million and;
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Food services and drinking places at $8.9 million.
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A boost to state funding for the HCBS direct care workforce would support 4,245 jobs annually and add $13.8 million in state and local tax collections.
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Increasing the salaries of Nebraska DSP produces many positive outcomes over and above the quality-of-life of current family providers and the individuals with IDD. These impacts are:
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Increase in hours worked of current DSP results in an equivalent of 612 DSP added.
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Approximately 711 new agency DSP would be added to the Nebraska provider workforce.
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An estimated 1,724 parents/caregivers currently out of the workforce will enter the Nebraska workforce.
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Once the likelihood of unemployment is taken into account an estimated 2,953 workers will be added to Nebraska employment.
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For Nebraska, DSP wages are currently 26.0% below adjacent occupations, or similar occupations and 16.9% below the regional average, producing a DSP shortage of 711 workers, or 18.6%.
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The lower Nebraska DSP wages have contributed to Nebraska’s higher turnover rate at 50.2%, eleventh highest in the nation. High turnover perpetuates a cycle of tax dollars continuously being spent on training new hires rather than delivering services.
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At the time of the study, 2,600 individuals were waiting to receive Nebraska IDD services resulting in up to a six-year wait. The average wait-time to receive services once offered in Nebraska is 122 days (hidden wait list). More Direct Support Professionals make it possible for individuals to access services without the wait.
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The starting wage for the HCBS sector is 30% lower than the wage for direct care staff at Beatrice State Development Center, the state-run facility for individuals with disabilities. The pay differential between HCBS and state-run facility direct-care staff could be perceived as undermining the Olmstead Act if the higher salary for state-run facilities is viewed as incentivizing institutional care.
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The under-sourcing of direct care staff salaries has resulted in many unintended fiscal outcomes. One such outcome is having to allocate funds to other systems, such as jails, emergency rooms, nursing homes, and regional centers. This happens when people with disabilities are redirected to other systems due to inadequate service options brought on by a lack of staff in their most suitable living and work environments.
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Likewise, millions of dollars in Medicaid funds to the state are going unused due to the underutilization of DD services and programming.
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Importantly, the presence of service providers increases the attractiveness of the community and, in the long run, encourages the startup and/or relocation of retail businesses and manufacturing firms to the state and the local area.