Labor argues aged care could be Australia’s next big job opportunity: union says 25% increase is needed – to cost $1.5B a year

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The Royal Commission reforms should be used to drive new jobs in the same way as manufacturing, transport and other-male dominated industries, Labor says – but what is a ‘responsible wage’ to pay aged care workers?

Labor MP and Shadow Minister for Senior Australians and Aged Care Services, Clare O’Neil (pictured above centre) delivered an impassioned speech – titled ‘The Economic Case for Aged Care Reform’ – to the McKell Institute in Sydney on Wednesday night, arguing that the Government’s response to the Royal Commission should be used to fix the widespread underemployment and low wages across the sector.

“Aged care workers are some of the worst-paid people in the Australian workforce,” she said.

“It is impossible to argue that the work being done – of caring for the most vulnerable, the highly physical tasks of bathing, of assisting with movement and exercise, of personal hygiene, of caring for challenging dementia patients – is even remotely commensurate with the wage being paid.”

Aged care an opportunity, not a money pit

Supporting higher pay for aged care workers would increase workforce participation for women, and flow back quickly through the economy as workers spend their increased earnings, she added.

“It is uneconomic, irresponsible and just plain wrong to see aged care as a money pit,” she said. “Aged care reform could help us tackle some of the biggest economic challenges we face.”

“Aged care jobs, and care jobs, should be good jobs. They should be properly paid. Their conditions should be decent and desirable. These jobs should give the workers in these sectors independence and economic power. And these workers should be able to consume and spend money in their communities and contribute to their own households and own neighbourhoods.”

It is estimated around one million people will need to be employed in aged care by 2050 to meet demand, but the entry level pay for an aged care worker is currently sitting at $21.09 an hour – less than for a supermarket shelf stacker, Ms O’Neil pointed out.

25% increase needed at the minimum, says HSU

The MP failed however to state what figure would be a ‘responsible wage’ to pay aged care workers.

We asked Health Services Union (HSU) National Secretary Lloyd Williams (pictured right), who represents over 90,000 workers across health and community services including aged care.

He estimates a 25% increase across the board – for example, from $21.09 to $26.36  for an entry level worker and from $21.96 to $27.45 for a Level 2 worker – is required.

If we apply the increase to the estimated 154,000 direct care workers (from the 2016 Aged Care Workforce Census as the 2020 results are yet to be published) in residential care, that’s an extra $1.5 billion in wages that will need to be found annually.

The HSU has made an application to the Fair Work Commission (FWC) to lift the wages of aged care workers to this level through a work value case.

“Aged care workers have never had their work value properly considered,” he said.

Union to also push for home care increases

This would be the minimum standard required, Lloyd adds.

“Disability support workers are currently paid more than aged care support workers because they had an equal remuneration order going back to 2013,” he points out.

“If you compare ­an aged care worker with one year experience, they are paid $21.08, to a disability worker with one year experience, they are paid $28.41. It’s time that aged care workers receive justice.”

The case is now expected to be heard later this year. The HSU is also preparing to take similar applications to the FWC for home care workers.