The Economic Costs of Family Caregiving
Studies show that solutions to reduce the impact on the economy and on the financial lives of caregivers are needed
More than a third of today's caregivers are employed full-time. They work various shifts and are responsible for caring for their loved ones. As these spouses, children and others take on caregiving responsibilities, public and workplace policies are needed to account for financial assistance or other support, such as family leave or allocated time off.
AARP Public Policy Institute recently released its new Valuing the Invaluable report about family caregivers' challenges. The report documented a "shadow economy," where unpaid family carers are the backbone of our nation's long-term care system.
According to this report, tens of millions of family carers provide 36 billion hours of care each year, valued at 600 billion dollars. That is more than ALL out-of-pocket health care spending in 2021.
"The workplaces that understand this reality and have a workplace culture that is supportive of caregivers also tend to be the ones that can best retain talent."
As the population ages and care needs continue to increase, the economic burden of informal care will continue to rise. In today's caregiving landscape, companies are grappling with unique challenges on how to implement organizational and system-based strategies to support family carers.
As Next Avenue Influencer in Aging Ai Jen Poo, co-founder and president of the National Domestic Alliance and co-founder and director of Caring Across Generations, said, "Because we all have loved ones we care for, there are caregivers in every workplace. The workplaces that understand this reality and have a workplace culture that is supportive of caregivers also tend to be the ones that can best retain talent," she said.
The Risk of Lost Income
One of the prominent issues mentioned in the AARP report was the impact on employment for working caregivers.
The report revealed that caregivers face financial risks such as lost income, reduced career opportunities and savings, and lower Social Security and retirement benefits. This burden also negatively affects businesses because of decreased employee productivity and the potential for more significant health risks.
As the population ages and care needs continue to increase, the economic burden of informal care will continue to rise.
Since 61% of family carers work either full or part-time, there is a significant chance that many people in the workplace are caring for loved ones. They have either been long-time caregivers or suddenly thrust into the role. Those individuals must deal with navigating the complicated web of health care and support services for the first time.
Juggling work schedules and at-home issues can impact family carers' emotional and physical health. Working caregivers often report emotional distress, psychological illness and physical health concerns due to the competing demands of caregiving and employment.
Studies now show that 81% of workers face some form of burnout or mental health issue, and 68% say that their daily work has been interrupted by these challenges. Change will be necessary because we are living longer but not necessarily healthier.
Toxic stress impacts how we age, including those caring for us, said Dr. Martin Picard, behavioral medicine associate professor at Columbia University at Columbia's 2022 Age Boom Academy. "Genes do not shape health. Stress shapes health."
Another cause for concern is the higher incidence of alcohol use among caregivers, particularly those caring for loved ones in the early stages of the dementia process, as mentioned by Dr. Sheria Robinson-Lane during an Age Boom presentation. She is an assistant professor at the University of Michigan School of Nursing whose research focuses on the impact of stress on caregivers.
"That's not something we talk about often," she said.
One approach involves empowering staff members to take advantage of paid time off or leave of absence. While this may be in the company's communication blueprint, some employees, particularly lower-level staff or certain minority groups, may not feel comfortable doing so. Workers in these positions are more likely to face adverse circumstances when they provide caregiving services to their family members.
Employees, despite their level, should be empowered to ask for what they need, but that can only happen in a healthy work environment that respects and appreciates every staff member.
How Employers Can Support Caregivers
"For instance, in the states where we have passed legislation, domestic workers have an actual floor from which to begin negotiations with their employers about the conditions and terms of their work," said Ai Jen Poo. "It is not the end; it is just the beginning. It all begins with establishing a floor. Much more can and will be done."
Latino millennials, in particular, work more hours each week, on average, and spend more time providing care than young adults of other backgrounds.
Creating a good work environment is possible in either hierarchical or flat organizational structures because companies must also see their employees as someone's family member or loved one. Ultimately, companies and employers could support working caregivers to reduce loneliness and isolation. They can employ innovative business interventions such as phone-based therapy sessions, online support forums and social group chat apps.
Employers could also implement cost-effective financial wellness programs to help reduce employees' financial stress and support their financial stability.
A Diverse 'Sandwich Generation'
Another prominent issue in the AARP report was the balancing act of "sandwich generation" caregivers. Per the report, in 2019, roughly 30% of family carers of older Americans lived in a household that included children or grandchildren. These caregivers are increasingly Gen Z and millennial carers and are more likely than other carers to be working while performing their caregiving responsibilities.
And it is the same within minority communities whose cultures are built around families: Currently, 30% of caregivers identify as a racial or ethnic minority. This number is expected to rise as the older adult population becomes increasingly diverse.
Minority caregivers are also more likely to live in multigenerational households, and various cultural factors may influence their experience. More than half of millennial caregivers are minorities and are often balancing caregiving with employment.
Latino millennials, in particular, work more hours each week, on average, and spend more time providing care than young adults of other backgrounds. In addition, they are more likely to live in multigenerational households.
If carers continue to leave the workforce to assume caregiver positions, the nation's economic growth may be impeded, and gender and socioeconomic inequalities may be further widened. Public policies and workplace programs need to identify solutions to reduce the impact on the economy, on caregivers and on their families.