Policy Research Brief, Vol. 28, No. 5

Wage Compression Among Direct Support Professionals

policy research brief, institute on community integration, university of minnesota

Research Issue

The profession of direct support is one of the largest occupations in the United States and demand for this essential workforce is growing. COVID-19 vaccinations play a key role in the ability of direct support professionals (DSPs) to maintain a healthy personal and professional lifestyle. However, DSPs from different racial backgrounds experienced variability in when and where they received vaccinations. While Black and White DSPs^ reported similar rates of being fully or partially vaccinated in our 12-month follow-up survey on COVID-19 and the direct support workforce, the findings point to significant disparities that may result in delayed vaccination, increased concerns or fear

The profession of direct support is one of the largest occupations in the United States. The demand for this essential workforce is growing, yet the supply of direct support professionals (DSPs) is nowhere near enough to match it. The workforce crisis among DSPs is well-documented and now approaching catastrophic proportions. People with intellectual and developmental disabilities are not able to receive the services they are authorized, and some businesses are closing programs permanently or temporarily because of the workforce shortage.

Low starting wages is a major factor contributing to the workforce crisis, with an average starting hourly wage of $11.56 an hour in 2019. PDF  Wage compression — where there is little difference in pay between new and more experienced staff — is also a major problem in disability support services and results in high turnover among both direct support professionals (DSPs) and frontline supervisors (FLSs). While the current average hourly raise per year among all hourly workers in the U.S. is between 3–5%, our data show that it is nowhere near that for the direct support workforce.

Providers of services for individuals with intellectual and developmental disabilities are constrained by low, non-negotiable reimbursement rates set by state Medicaid agencies. In many states, Medicaid rates have been stagnant or have decreased in the past decade. As a result, providers do not have enough funding to recruit new staff or raise wages to keep experienced staff. Both low starting wages and wage compression must be addressed for the DSP workforce crisis to be solved.

Study Background

For the vast majority of DSPs, staying home during the COVID-19 pandemic is not an option. The National Alliance for Direct Support Professionals (NADSP) and the University of Minnesota’s Institute on Community Integration (ICI) wanted to hear directly from DSPs about their experiences in supporting people with disabilities during this period. In response, ICI developed a series of online surveys and collaborated with NADSP to reach DSPs from across the country; the intent was to inform effective policy and practice decisions about what is needed and to better prepare for potential future waves of this or other pandemics. The three surveys were fielded in April 2020, November 2020, and June–July 2021 and, in total, received responses from more than 18,000 unique participants. A full description of the study and findings can be found at z.umn.edu/dsp-covid19 .

All three surveys asked about respondents’ hourly wage at the beginning of the pandemic (January 2020) and the third survey also asked about current wages. Respondents also provided information on the length of time they worked at their primary employer (tenure of fewer than 6 months, 6 months to 1 year, 1–2 years, 2–3 years, or 3+ years).

This Brief uses all three waves of data about wages and work tenure to examine wage compression. Average wages in each tenure category are shown, along with what would be expected if wages kept up with a 4% annual increase that is usual in other industries.

Key Findings

DSP Wages and Tenure

At every length of tenure, there is a gap between what would be expected if DPSs saw a 4% annual increase in wages and what their wages actually are.

Line graph showing hourly wage on the vertical axis, from $12.25 to $15.25, and tenure on the horizontal axis shown as 0 to 6 months, 1 to 2 years, and 2 to 3 years of employment for DSPs at their current employer. Four lines in different colors are shown on the graph, indicating starting wage in January 2020 as reported on the first survey, starting wage in January 2020 as reported on the 6-month survey, starting wage in January 2020 as reported on the 12-month survey, and current wage reported on the 12-month survey. Each line also is also paired with a dotted line showing what wages would be if wages kept up with a 4% annual increase. The blue line representing January 2020 wages from the initial survey shows hourly wages of $13.07 for 0-6 months of employment, $13.25 for 1-2 years of employment, $13.44 for 2-3 years, and $14.14 if there had been a 4% increase. The orange line representing January 2020 wages from the 6-month survey shows hourly wages of $13.16 for 0-6 months of employment, $13.32 for 1-2 years of employment, $13.48 for 2-3 years, and $14.23 if there had been a 4% increase. The gray line representing January 2020 wages from the 12-month survey shows hourly wages of $13.49 for 0-6 months of employment, $13.68 for 1-2 years of employment, $13.45 for 2-3 years, and $14.59 if there had been a 4% increase. The green line representing current wages from the 12-month survey shows hourly wages of $13.87 for 0-6 months of employment, $14.20 for 1-2 years of employment, $13.97 for 2-3 years, and $15.00 if there had been a 4% increase.

FLS Wages and Tenure

At every length of tenure, there is a gap between what would be expected if FLSs saw a 4% annual increase in wages and what their wages actually are.

Line graph showing hourly wage of frontline supervisors on the vertical axis, from $16.00 to $20.50, and tenure on the horizontal axis shown as 0 to 6 months, 1 to 2 years, and 2 to 3 years of employment at their current employer. Four lines in different colors are shown on the graph, indicating starting wage in January 2020 as reported on the first survey, starting wage in January 2020 as reported on the 6-month survey, starting wage in January 2020 as reported on the 12-month survey, and current wage reported on the 12-month survey. Each line also is also paired with a dotted line showing what wages would be if they kept up with a 4% annual increase. The blue line representing January 2020 wages from the initial survey shows hourly wages of $17.30 for 0-6 months of employment, $16.71 for 1-2 years of employment, $16.57 for 2-3 years, and $18.71 if there had been a 4% increase. The orange line representing January 2020 wages from the 6-month survey shows hourly wages of $17.58 for 0-6 months of employment, $17.34 for 1-2 years of employment, $17.60 for 2-3 years, and $19.01 if there had been a 4% increase. The gray line representing January 2020 wages from the 12-month survey shows hourly wages of $17.68 for 0-6 months of employment, $16.22 for 1-2 years of employment, $17.65 for 2-3 years, and $19.12 if there had been a 4% increase. The green line representing current wages from the 12-month survey shows hourly wages of $18.64 for 0-6 months of employment, $16.86 for 1-2 years of employment, $18.72 for 2-3 years, and $20.16 if there had been a 4% increase.

Policy Recommendations

Low starting wages and wage compression between new and more experienced staff are at the root of the DSP workforce crisis. Both must be addressed. Our recommendations include:

  • Ensure greater emphasis by the Centers for Medicare and Medicaid Services (CMS) on the need for states to set adequate rates that are high enough to recruit new entrants to the field and to retain existing staff.
  • Implement comprehensive Medicaid rate reform.
  • Ensure that increases in minimum wages at the local, state and federal levels are made available to DSPs and accompanied by pay adjustments to other positions and levels of experience.
  • Ensure that wage increases are not limited to hiring bonuses. Simply adding bonuses just for signing on contributes to the existing wage compression.
  • Implement regular cost of living (COLA) increases for Home and Community-Based Services (HCBS). These are commonly available to nursing homes but are very rare for HCBS.

    Policy Forum

    Join us January 26, 2022 from 1 to 2:30 p.m. CT on Zoom for the Policy Forum on this issue of Policy Research Brief. Register here.

    The Policy Forum is a monthly web-based presentation and facilitated discussion exploring research published in the most recent Policy Research Brief. Please visit the website for details and to view previous forums.

    Published December, 2021

    Editor: Julie Bershadsky

    Graphic design: Connie Burkhart

    Research cited: Hewitt, A., Pettingell, S., Bershadsky, J., Smith, J., Kleist, B., Sanders, M., Kramme, J. (2021). Direct support workforce and COVID-19 national report: Twelve-month follow-up. Minneapolis: Institute on Community Integration, University of Minnesota.

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