Cooper, other systems hope adoption of $15 minimum wage sparks growth across health care industry

By Anjalee Khemlani
New Jersey | Nov 27, 2018 at 10:51 am

Cooper University Health Care was the latest New Jersey employer to announce it will adopt a $15 minimum wage, earlier this month, and it was the first health care entity in the state to announce the move — but other health care systems are also working on it.

Last week, St. Joseph’s Health and Inspira Health Network also said they are working on increasing their minimum wages to $15.

St. Joseph’s began implementing a phased increase in September and has an ambitious goal of reaching a systemwide $15 wage by Dec. 31, 2019.

Some of those already benefiting include patient transporters, housekeeping aides, food service aides and medical record clerks — in total, more than 10 percent of the workforce, or about 750 employees.

“It’s obviously an increase to our payroll expense, but we think it’s well-deserved,” CEO Kevin Slavin told ROI-NJ.

“This is a positive impact for the region, economically.”

As the largest employer in Paterson and Wayne, this move affects residents of both. About one-third of employees are from the cities, Slavin said.

About half of the 750 live in Passaic County.

Similarly, Cooper’s announcement last week affects a significant portion of the Camden city and Camden County population.

Board Chairman George Norcross told ROI-NJ that he made the move because the government hasn’t.

“In the country, there’s a growing gap, and has been for several decades, between the haves and have-nots,” Norcross said. “There has been on the federal and state level a lack of appropriate initiatives to increase our standard of living in the state and in the country. Anything less than $15 an hour should be unacceptable. This is the United States of America, we should be paying people wages that are more than fair.”

Minutes after the announcement last Tuesday, Gov. Phil Murphy weighed in on the issue, which was one of his campaign promises.

“As the first health care system in New Jersey to raise its minimum wage to $15 an hour, Cooper Hospital is making a meaningful long-term investment in both its workforce and in the local economy,” he said.

Murphy then called out the Legislature for inaction on a statewide bill.

“For the more than 1 million New Jersey workers who are not employed by Cooper Hospital and earn less than $15 an hour, the Legislature needs to act now to close the wage gap and give working families the boost they need to afford life’s essentials and build for a strong future,” Murphy said. “I urge the Legislature to translate words into action and pass a minimum wage of $15 (per) hour for every working family in New Jersey this holiday season.”

Norcross said the great thing about being part of a private or not-for-profit company is that you don’t need a Legislature, simply an agreement among board members.

Both Norcross and Slavin are making the move as the health care industry faces downward pressures on revenue.

“It’s really difficult to fit this into a new operating budget, where everyone is looking at what’s called revenue compression,” Slavin said. “Less hospital admissions, more outpatient, more home care, more ambulatory care, and that means less overall revenue. We’ve taken a hard look at how to pay for this out of our non-salary expenses.”

That includes reducing the reliance on outside entities and vendors for things that can be done in-house.

For example, consolidating vendors used for certain supplies — which will save about $1.9 million in a year, Slavin said.

But the move does not affect home health aides, which are often not part of hospital systems. Medical professionals who care for the elderly are among the most notoriously underpaid, according to various reports in recent years.

“One of the things the state of New Jersey has not done for a number of years is to increase the reimbursement for home health aids and nursing care and assisted care living facilities, under certain programs administered by the state,” Norcross said.

“It seems to me as thought we ought to be doing something to enlist those who are on the lesser parts of the scales in the country.”

Slavin thinks that a government mandate is inevitable.

“I think everyone is going to be mandated by the state at some point, that’s our prediction, so our goal was to do this proactively, and I think the other elements in the industry will have to follow thereafter,” he said.

At the state level, Senate President Steve Sweeney (D-West Deptford), a Norcross ally, has pushed for the $15 minimum wage. Assembly Speaker Craig Coughlin (D-Woodbridge) is also working on legislation in Trenton now.

At the federal level, Norcross’ brother, U.S. Rep. Donald Norcross (D-N.J.), is the sponsor of a federal $15 minimum wage bill.

“As Don often says, the best social program is a job, and a well-paying job,” Norcross said. “You’re going to hear some opponents to this kind of thing that this is going to drive up pricing, this is going to cost people more money. I’d argue that it would cost government more money to have to support, through government programs, those who aren’t earning enough to support themselves and their families.”

Hospitals have been working on increasing wages across the various fields and have made progress, according to New Jersey Hospital Association CEO and President Cathleen Bennett, a former Department of Health commissioner.

“We definitely love what Cooper has done in taking this proactive step,” she said. “One of the things that you recognize is that health care employees play a vital role in delivering quality care and supporting healthy communities.”

The hope is, Norcross said, that others in the Delaware Valley region and around the state will follow suit.

“I’ve looked at the financial statements of some institutions; they are doing quite well,” he said. “They have a responsibility to step up and to try to help those who need a helping hand.”

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Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem