One of the nation's largest health systems will for the first time set a systemwide minimum wage of $11 an hour.
St. Louis-based Ascension last week joined a few other big employers including Aetna, Wal-Mart Stores and Target Corp. in announcing raises for low-paid workers amid growing national discussion of income inequality.
Under the new policy, about 10,500 workers at Ascension and its 12 subsidiaries, including Ascension Health, will see a raise as of July 5. That's about 7% of the system's workforce. The organization previously paid minimum wages of $9 to $10 in most markets.
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. The wage floor also will apply to home-care workers who are part of a joint venture Ascension formed last year.
In a news release, Anthony Tersigni, Ascension's CEO, called his system's new minimum wage “socially just” and an example for other healthcare employers. Tersigni earned $8.5 million in 2013, the most recent year for which salary information was publicly available.
The healthcare industry employed 2.8 million workers in 2014 who earned the federal minimum wage of $7.25 an hour or less, according to the Bureau of Labor Statistics. Nationally, median income for home health and personal-care aides hovered near $20,000 in 2012.
Among employers competing for the same workers, wages must keep pace to attract and keep employees, said Yannet Lathrop, researcher and policy analyst with the National Employment Law Project, which supports increasing the minimum wage. 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 moves have occurred in labor-friendly markets where unions have already negotiated higher wages for low-wage workers, he said.
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.
