The U.S. 'has become a nation of caregivers,' expert says

·4 min read

The cost of caring for children, growing old, being ill, or otherwise needing care has never been higher.

According to a recent report from AARP, roughly 38 million family caregivers provided an estimated 36 billion hours of care in 2021, contributing an estimated economic value of approximately $600 billion. However, family caregivers often provide this financial, social, and medical support for no pay.

"America has become a nation of caregivers," Jason Resendez, president and CEO of the National Alliance for Caregiving, told Yahoo Finance. "Yet, their work often goes unrecognized by policymakers and employers. As a result, more than 40% of family caregivers report negative financial impacts due to their caregiving responsibilities — they leave work, stop saving for retirement, and go into debt."

Caregiving needs have also led to job losses, particularly since three-fifths of family caregivers are active in the U.S. workforce. In 2021, the need for caregiving led to the loss of more than 650,000 jobs, which has an economic effect of roughly $44 billion, according to Blue Cross Blue Shield. An additional 800,000 caregivers suffered from absenteeism issues in the workplace because their caregiving roles are so time-consuming.

Senior citizens listen as various speakers address the group at the Williams YMCA in Jacksonville, Fla., about the seriousness of the flu. (Rick Wilson/AP Images for NCOA)
Senior citizens listen as various speakers address the group at the Williams YMCA in Jacksonville, Fla., about the seriousness of the flu. (Rick Wilson/AP Images for NCOA)

On April 18, President Biden signed an executive order aimed at supporting family caregivers. The order directs state and federal agencies to improve jobs and compensation for caregivers, increase access to affordable care for families, and improve data and information on the care workforce among other measures.

Biden noted the order "doesn't require any new funding" and will aim to better the support for care workers and family caregivers.

An increasingly aging population

As America's population continues aging, there is an increasing need for caregivers.

By 2040, there will be 80.8 million people aged 65 and above, according to U.S. Census Bureau projections. But even though there are at least 3 million U.S. caregivers who are considered Gen Z, the number of young people who are able to support this aging population may not be enough.

Overall in the U.S., there are 114.5 caregivers for every 1,000 residents. West Virginia and Mississippi are the states with the highest number of caregivers per capita, while Midwest states like North Dakota, South Dakota, Nebraska, Minnesota, and Michigan are on the bottom end with less than 100 caregivers per 1,000 people.

“As the major public payer for long-term services and supports and regulator of providers, states are facing the challenges of helping families live in their homes and communities while grappling with the shortage and working conditions of direct care workers — with increasingly aging populations,” Hemi Tewarson, executive director at the National Academy for State Health Policy, told Yahoo Finance.

Typically, caregiving needs have been picked up by "sandwich generation caregivers" — workers between the ages of 35-64 who are responsible for caring for children and aging parents. But now, as Gen Z and millennials enter the workforce, they are becoming the ones taking on caregiving roles while still working full-time.

The AARP report indicates that 60% of caregivers work either a full-time job or part-time job, while 30% are caregiving for more than one family member.

Maintaining a full-time job is often necessary since caregiving can be a costly endeavor. According to the AARP report, family caregivers on average spend roughly 25% of their income on out-of-pocket caregiving costs, which "does not account for the opportunity cost of the foregone wages of caregivers who cut back hours or give up paid employment nor lost lifetime income tied to these employment disruptions."

This is especially true for younger caregivers since they have fewer lifetime financial resources, along with Black and Hispanic/Latino caregivers, who report a higher strain from these costs, according to AARP.

"We were pleased to see the Biden administration take executive action on this growing economic challenge," Resendez said. "Now it’s time for Congress to act on our National Strategy to Support Family Caregivers and pass smart economic policies such as paid family and medical leave to make caregiving more sustainable and more equitable for American families."

Tanya is a data reporter for Yahoo Finance. Follow her on Twitter. @tanyakaushal00.

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