As­cen­sion ups wage floor to $11 an hour

Modern Healthcare - - NEWS - By Me­lanie Evans

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 sup- ports 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.

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