The care economy is the ecosystem of care, both those who receive and those who provide care, across the lifespan from early childhood education to care for older adults and people with disabilities. Supporting and strengthening the care economy not only includes ensuring that care is accessible, affordable, and high quality, but that the broad spectrum of caregivers, either paid or unpaid, licensed or license-exempt, are equally supported and valued in providing care.
The Care Economy and Economic Mobility
A strong care economy has rippling effects for upward economic mobility and gender and racial equity for those receiving care, family members, and the caregivers. Accessible, quality care allows older adults and people with disabilities to live as independently as possible. It enables individuals to live in their community of choice, maintain social connections, and remain healthy. For children, accessing quality child care is linked to higher academic outcomes and improved future earning potential. Additionally, receiving care can be the difference for family members to stay in the workforce, both supporting their families and Colorado’s economy. Finally, women, and particularly women of color, are disproportionately represented as care providers. Ensuring living wages and benefits to paid caregivers, and supporting family or unpaid caregivers, fosters greater economic security across gender and racial lines.
The Web of Caregiving
A critical part of a robust care economy are the caregivers. There are many factors, including cost, availability and varying preferences among recipients of care and their families that determine how and where care is received and by whom. As a result, people can receive care through many avenues.
Care for Older Adults and People with Disabilities
Older adults and people with disabilities may receive care in their own home, at a community or assisted living facility, a nursing home facility, or a mix of settings if they attend a day program. Across all of these settings, direct care workers (personal care aides, home health aides, or nursing assistants) are the ones providing much of the hands-on care. Direct care workers help perform everyday tasks like getting dressed, household work, providing company, and some medical care like administering medications and changing bandages. However, due to both challenges in the care economy, explored more below, and personal preferences, unpaid family members or friends provide up to 80 percent of long-term care.
Early Childhood Education
Similarly for young children ages 0-5 years old, there are a variety of settings in which young kids receive care. Care is provided at licensed child care facilities like centers or family child care homes or in more informal, license exempt settings, by family, friends, and neighbor (FFN) child care providers. Regardless of setting, these child care providers care for infants, toddlers, and preschoolers, engage children in activities and advance their social and emotional growth for their continued education.
State of the Care Economy in Colorado
Despite the immense value that care and caregivers provide, it remains undervalued and unable to meet the growing need in our state. As a result, the caring workforce faces significant challenges and individuals struggle to access and afford the care they need.
Caring Workforce
Care workers experience low wages, minimal benefits, and few workplace protections. This has led to high turnover rates and workforce shortages in both the child care and direct care industries. With median hourly wages ranging between $17-$21 an hour, many care workers struggle to afford necessities such as housing. Notably, 41 percent of Colorado’s direct care workers rely on public assistance to help make ends meet. Among early childhood educator households in Colorado, 32 percent participated in a social safety net program in 2022.
Although increased compensation is still needed, during the 2024 legislative session, Colorado passed the Care Worker Tax Credit which provides a $1,200 refundable tax credit for eligible care workers (including FFN providers). Additionally, in 2023 the legislature established the Direct Care Workforce Stabilization Board to encourage higher wages and benefits for care workers.
Accessibility
Partially due to the workforce shortages as well as the cost to provide care, care can be difficult to access. Across the state of Colorado, there are more children in need of care than the amount of available licensed child care spots, though many children and families also turn to license exempt FFN care. While the population of older adults in Colorado continues to rapidly increase, so does the need for care. While there was some growth in the number of home health and personal care aides between 2019 and 2023, there continues to be a shortage of workers in these fields. Workforce shortages leave families without reliable and consistent care and many are forced to cut down on work hours or leave the workforce entirely in order to provide care.
Affordability
Care is costly to provide and therefore is often unaffordable for families. Colorado families, on average, pay between 13 to 30 percent of their income on child care, depending on the age of their child. This is well above the 7 percent of income that the U.S. Department of Health and Human Services recommends. Additionally, it is well documented that older adults and people with disabilities who are in need of care, will in some cases spend down their assets in order to qualify for Medicaid and access the care they otherwise cannot afford. In attempts to address the affordability challenges, there are a variety of programs that help subsidize the cost of care such as the Child Care Assistance Program, Universal Preschool Program, and Medicaid’s Home and Community Based Services waivers. Despite these necessary programs, many still struggle to afford care.
Conclusion
The caring economy includes the people and systems that provide care across all stages of life. This workforce is broad and often under-recognized, but it plays a critical role in keeping families, communities, and the overall economy strong.
