The Economic Costs of Caregiving

Caregiving is a silent driver of poverty and inequality for family and professional caregivers. There are more than 40 million Americans who care for an older adult. That family member could be a parent, older sibling or extended family. The average caregiver is a woman in her late 40s and, no matter the gender of the caregiver, they will incur out-of-pocket expenses.

According to Howard Gleckman in Forbes, “Of the $266,000 in average costs for those families who use paid care, $140,000, or 55 percent, is paid out of pocket.” More than half of that money will likely come from one individual’s resources. And often, that individual is the caregiver.

Given that many Baby Boomers are or will soon be older adults and that the average life expectancy continues to climb, the financial impact of caring for an older family member cannot be underestimated. The cost of caregiving can cause a tremendous strain on the caregiver’s budget. Physical and mental difficulties make care more expensive. If the older family member has dementia, for example, they’ll need specialized care, which can cost more than $300,000 over the course of their life, plus home alterations to ensure their safety, as well as medications that can cost up to $400 per month. 

Hiring a home health aide can cost more than $50,000 per year. And although Medicaid is available to Americans who have a low income, there can be a tremendous amount of red tape to cut through, including being placed on a long waitlist to receive care. The cost of nursing home care is already prohibitive and, for many, out of the question. The only option left for many is to care for the elder themselves.

The Numbers Don’t Add Up

This caregiving responsibility generally falls on women. With no national paid family and medical leave policy, women often have to decide whether to remain in the workforce, reduce their work hours, turn down promotions that come with more responsibilities, or quit jobs altogether to take care of an older loved one. Given low and stagnant wages, cost of living increases, and out-of-pocket expenses of caregiving, leaving the workforce creates even more financial strain. It also means that women are unable to save for their retirement or build wealth. Leaving the workforce to care for a family member doubles the chances that a woman will end up in poverty. 

‘Leaving the workforce to care for a family member doubles the chances that a woman will end up in poverty.’ 

And if the caregiver also is caring for children, the costs of care for multiple generations compounds an already financially bleak situation. In its most recent survey, the U.S. Department of Agriculture estimated that it would cost the average two-parent family about $230,000 to raise a child born in 2015. But what’s less appreciated is just how expensive it is to care for an older family member or a family member with a disability, which is a reality for more people each day.

This economic insecurity that already centers sexism is further compounded by racism. Because women of color make even less money than White women, who make less money than men, their chances of facing economic hardship, simply by choosing to care for someone they love, is even greater. On average, a Black woman in West Virginia earns $31,090 per year. According to data gathered from the Economic Policy Institute, it costs a family with two parents and two children about $94,000 a year to live adequately in the Charleston area, the state’s capital:

  • Housing: $9,660
  • Child Care: $15,820
  • Food: $8,512
  • Transportation: $13,873
  • Healthcare: $27,039
  • Miscellaneous: $6,585
  • Taxes: $12,600

Total: $94,089

The math doesn’t add up. The total cost of living in Charleston is more than three times the average yearly salary of a Black woman who lives there. Because Black men in the state make a median hourly wage of $16.29 per hour, or about $34,000 a year, having a partner won’t help make ends meet. Even if she’s single and receiving assistance that covers childcare, healthcare and food, she’d have less than $2,000 of her salary left. How, then, can she cover out-of-pocket expenses she’d incur—such as transportation to and from medical appointments, additional food, or medicine—should she be charged with taking care of an older loved one? She can’t—not until the federal government attempts to redress what is, essentially, a manufactured problem.

Caregiving’s Sexist and Racist Foundation

The United States has adequate resources to provide the support caregivers need to care for themselves and their families. But to do so, this country must disabuse itself of the belief that caregiving is solely a private, individual or family matter and that any challenges in caregiving are due to some individual or familial failure to prepare for the situation. This country also must unlearn the idea that caregiving is solely or primarily the responsibility of women, and that doing so must happen, no matter the cost and sacrifice, and that caregiving, for women, meets some innate maternal desire. These beliefs are outdated, sexist, racist, and often delay progress toward policies that could have real impact on people’s lives.

Caregiving should not be thought of as solely or primarily the responsibility of women.

Policies that would better support caregivers have long been clear, identified often by caregivers themselves. The United States must provide a comprehensive national paid family and medical leave policy so that caregiving doesn’t mean, by default, a complete disruption of work and career. Such a move would relieve many of the financial burdens of caregiving and allow the United States to address the other, intangible consequences of caregiving for an older or disabled family member, such as the mental health of the caregiver or the unique challenges of being a member of the Sandwich Generation—those who take care of children and an older family member.

Quality childcare must be more accessible and affordable, especially for those whose incomes are being consumed by adult-care and childcare expenses. There must be increased access to home- and community-based supports for all who need care and care workers must be paid a thriving wage, which would help to address the worker shortage in the field. And, yes, family caregivers who care for older family members should be paid—work that requires at least 20 hours per week—and offered Social Security credits for caregiving so caregivers can do so without putting their financial future in jeopardy. 

When this country collectively recognizes the value of caregiving and recognizes it as labor—and ensures caregivers receive the support they deserve, it will buttress the national economy by providing adequate wages and other support. That then will allow all women, particularly women of color, to participate in the workforce, stabilizing their families, their communities and, by extension, this nation. It is also a guaranteed way to disrupt generational poverty and change the trajectory of care in this country.

Josephine Kalipeni, MA, is Executive Director of Family Values @ Work in Washington, DC.