UPMC, the hospital, physician and insurance system headquartered in Pittsburgh, has pledged to raise the minimum wage of workers to $15 an hour by January 2021, following in the footsteps of several other hospital systems.
UPMC's pay hike for entry-level workers matches what hospitals have done in Boston, although UPMC's timeline is longer. Beth Israel Deaconess Medical Center, Boston Medical Center and Tufts Medical Center each raised their minimum wage levels to $15 an hour, and those policies went into effect this year. Tufts Health Plan, a health insurer based in Massachusetts, recently raised its wage floor to $15 an hour.
Geisinger Health System, a cross-state competitor to UPMC in Danville, Pa., increased its minimum wage to a more modest $10 an hour, effective this past September. Ascension Health, one of the largest not-for-profit health systems in the country, boosted salaries systemwide to at least $11 an hour last July.
Healthcare unions have increasingly called for pay raises. Although doctors, nurses and other clinical workers usually make good wages, the industry still employs millions of low-wage workers who have struggled to make ends meet. Their message has resonated this election season, as income inequality and economic hardship have become big political rallying points, particularly for Democratic presidential candidate Sen. Bernie Sanders.
But healthcare companies may also be feeling the effect of a tightening labor market and therefore are bumping up wages to attract highly qualified workers.
UPMC did not detail how much the raises would cost, noting they are part of the system's overall compensation budget. A spokeswoman also said the policy was being phased in over five years to keep the budget steady.
"This is being accomplished strategically and responsibly so that there is no negative impact on either healthcare costs for our patients or on premiums for our health plan members," the spokeswoman said.
The Service Employees International Union, which represents many UPMC employees, hailed the wage hike as a victory for its members and other employees. SEIU noted that in 2014, UPMC Chief Administrative Officer Gregory Peaslee told the New York Times that a $15-an-hour minimum wage is “a great notion, but it's not realistic.”
SEIU and UPMC have clashed several times, including when the union filed a complaint with the National Labor Relations Board alleging “multiple unfair labor practice charges” at UPMC. Union employees who work at UPMC will still have their wages and benefits negotiated through their union.
Wage hikes have raised the ire of the healthcare industry in New York. When Gov. Andrew Cuomo called for raising the minimum wage in the state to $15 for all public- and private-sector employees during his State of the State address, industry representatives said they wanted to make sure any funding the state offered providers to cover it would not be counted toward the overall cap on the Medicaid budget.
The Healthcare Association of New York State estimates a $15 minimum wage will cost hospitals $570 million annually and nursing homes $600 million. Home care agencies, which often employ low-wage workers for 24-hour shifts, would see the highest wage hike: more than $1.7 billion per year, according to the group's calculations.
