One of the nation's largest health systems, Ascension Health, will for the first time set a systemwide minimum wage of $11 an hour.
St. Louis-based Ascension Health is the nation's largest Roman Catholic health system. It joins other national employers—including insurer Aetna and retail giants Wal-Mart Stores and Target Corp.—in announcing raises for low-paid workers as the national debate over income inequality heightens public attention on low wages.
Ascension Health and 11 other subsidiaries of the system's parent company, Ascension, are adopting the $11 minimum an hour wage. Under the new policy, about 10,500 Ascension workers, or about 7% its workforce, scattered across nearly two dozen states, will see a raise as of July 5.
Notably, the wage floor will apply to home care workers who are part of a joint venture Ascension formed last year. Federal minimum wage laws did not apply to workers who provide direct home care services. A new rule to change that is tied up in court.
Ascension said employees who are likely to see higher wages work in the system's laundries, kitchens, reception areas and as aides and assistants to patients, medical staff and administrators.
Anthony Tersigni, Ascension's president and CEO, declined to be interviewed Thursday but in a news release called the system's new minimum wage “socially just” and an example for other employers in healthcare. Tersigni earned $8.5 million in 2013, the most recent year for which salary information was publicly available.
The American Hospital Association, the nation's largest hospital trade group, has no policy on the minimum wage, a spokeswoman said.
Healthcare employs roughly one in 10 U.S. workers across low- and high-paid occupations. For example, home health and personal care aides' median income hovered near $20,000 in 2012, compared with $65,000 for registered nurses and $187,000 for doctors.
The industry is a major employer of low-wage workers. Healthcare employed 2.8 million workers in 2014 who earned the federal minimum wage of $7.25 an hour or less, the Bureau of Labor Statistics reports. Healthcare and education employ one out of five workers who are paid $7.25 or less.
Recent minimum-wage increases provided by large employers and major U.S. cities suggest some momentum that could prompt other corporations to act, said Yannet Lathrop, researcher and policy analyst with the National Employment Law Project, an advocate for an increase to the minimum wage. New York and Washington D.C. are debating proposals to raise the wage floor and Chicago, Seattle and recently, Los Angeles, have done so, she said. Among employers competing for the same workers, wages must keep pace to attract and keep employees, Lathrop said. For example, Target raised its minimum wage after Wal-Mart said it would do so.
But the push by cities and states to raise the wage floor may have little effect on health systems, said James LeBuhn, senior director with Fitch Ratings. Such activity has occurred in labor-friendly markets where unions have already negotiated higher wages for low-wage workers, he said.
Meanwhile, Aetna's announcement in January that it would pay its workers at least $16 an hour did not convince others to make similar changes. Aetna said the move was expected to reduce the $120 million it currently spends to address turnover. Higher wages would cost about $25 million next year, the insurer said.
An Ascension spokesman declined to say how much Ascension will spend to raise wages. Last year, Ascension spent $8.2 billion on salaries and wages. The not-for-profit previously paid minimum wages of $9 to $10 in most markets.