Steller: Minimum-wage law creates beneficial crisis in services

December 28, 2016
Arizona Daily Star
Tim Steller

Imagine changing adult diapers in your work, day after day, week after week.

It would be pretty repulsive after the rst one and might make you wonder why you’re doing this $8.50-an-hour job in the first place.

Now imagine that changing adults’ dirty diapers is only one of dozens of duties in your just-above-minimum-wage job. You help with feeding, maybe, or stay overnight to take care of any needs your disabled client may have while sleeping, or help your client’s family members with the diculties of managing a disabled loved one’s day-to-day life. It’s a job that requires you care.

For $8.50? Most people who take the job, leave it.

That’s why the minimum wage increase we Arizona voters passed this year represented both a curse and a blessing to the agencies tasked with helping developmentally disabled and disabled elderly people who need in-home care.

Soon after voters passed the law, the 600-plus agencies in Arizona that provide these services started sounding an alarm. They could not survive over the long term, the agencies said, if they have to pay these increased wages.

The reason: The state was already reimbursing them too little money for the care they provide, since cuts that began in 2009. If they also have to pay more for labor — $10 an hour starting Jan. 1 — that would make their organizations nancially untenable. The increased costs would sink them.

The agencies were quick to point out that they weren’t necessarily opposed to paying their employees more, but that their funding comes in the form of reimbursements for services provided from the state and federal government, which were already paying them too little. That’s what forced them to pay their employees so little.

“We’re certainly supportive of the minimum wage increase,” said Robert Bennetti, executive director of the Tucson Residence Foundation. “It’s just that we have no way to oset the additional labor expense.”

A McDonald’s can use kiosks and robots instead of people, he pointed out, but agencies providing services for adults with developmental disabilities cannot. People still need to go to the clients’ homes and serve their needs.

The big-business opponents of the minimum-wage increase saw in this adult-care crisis a legal argument for striking down the minimum-wage initiative. The Arizona Chamber of Commerce didn’t bother to put up much of a ght during the campaign, preserving instead its options for ghting in court after the election, which is of course a sorry way to ght. Its rst argument in current lings before the Arizona Supreme Court is that this initiative violates the state’s Revenue Source Rule.

That rule says that initiatives requiring an expenditure by the state must include a source of revenue for that expenditure. If the source of revenue identied in the initiative doesn’t pay for the full costs of the initiative, then the Legislature need not pay more than what that revenue source provides. It’s a good rule, which keeps us from passing pie-in-the-sky initiatives and forcing the Legislature to deal with the costs.

Since the providers of these services must pay the minimum wage, and since their costs are covered in part by the state, that means the state is being forced to cover a new expenditure without a revenue source, the chamber argues.

A lower court already found, though, that isn’t the case. And it’s an unlikely argument to prevail at the Supreme Court, in my view, because the state actually does not have to increase its spending. It could simply cut services. But of course, no one wants fewer services for adults with developmental disabilities.

I talked Tuesday with Tucsonan Lois Bowen, who cares for her 37-year-old son, Rusty. He has had cerebral palsy from his premature birth and is quadriplegic. You can imagine that caring for him is a full-time job, though it is one Bowen and her husband, now deceased, have done willingly.

Problems arose in October when Bowen fell and broke her hip. Suddenly, she couldn’t care for Rusty, and the hospital would not release her until she had someone to care for him.

“We had to get the agencies to provide almost around-the-clock coverage for Rusty, so I could recuperate from my broken hip,” she said.

That’s what happened. An agency worker stayed overnight, another helped during the day, and eventually Bowen got better. Now she is able to take care of her son again, but she fears what will happen to her or others in crisis if agencies can’t aord to stay in business.

The agencies themselves lobbied the Arizona Department of Economic Security for help during the last month. Lo and behold, DES came up with the money to cover these services being paid at a higher rate until the scal year ends June 30.

The agency found $25.1 million to pay for services at the higher minimum wage for developmentally disabled clients. Another $20.3 million is 􏰀􏰁going into the care of the elderly and disabled. This legislative session, the trick will be to convince state legislators to increase the
reimbursement rates for the social service agencies so that they can continue to provide the same level of service and pay at least $10 per hour.

Those rates were cut in 2009 and again in 2012 and have only been partially restored. The new minimum-wage initiative is proving so far to be the lever needed to increase reimbursements.

That’s a good thing. We should want people doing these demanding jobs to be paid better and to stick around for a while despite the diculties. Instead of causing a crisis in the social-service agencies, the higher minimum wage could end up being a solution to the problems of low pay, turnover and low reimbursements.

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