Elder care homes rake in profits as workers earn a pittance

Stephanie Costa was 30 and enjoying a lifestyle supported in part by six board-and-care homes she owned in California’s Central Valley. But half of that fortune was threatened when she and her company initially were cited for about $1.6 million for labor violations, including wage theft — not paying 11 employees for working much of 24 hours a day, six days a week.

Costa, who declined to be interviewed, is a rare public face of a burgeoning multibillion-dollar elder care industry that is enabling operators to become wealthy by treating workers as indentured servants. Across the country, legions of these caregivers earn a pittance to tend to the elderly in residential houses refurbished as care facilities, according to an investigation by Reveal from the Center for Investigative Reporting.

The profit margins can be huge and, for violators of labor laws, hinge on the widespread exploitation of thousands of caretakers, many of them poor immigrants effectively earning $2 to $3.50 an hour to work around the clock. The federal hourly minimum wage is $7.25.