- Beginning July 5, Ascension will raise its minimum wage to $11 per hour, a move that will impact 10,000 workers—about 7% of Ascension's 150,000 employees.
- Most of the impacted workers are support staff, such as kitchen and laundry workers, and aids and assistants to medical staff and administrators.
- The pay hike will also apply to home care workers who participate in an Ascension joint venture formed last year, significant because federal minimum wage laws do not apply to workers who provide direct home care.
"We believe our associates deserve a socially just wage that acknowledges the dignity of the human person and the spiritual significance of the care they provide every day to those we serve and to their fellow associates," CEO Anthony Tersigni said in a statement.
Outside of healthcare, a number of large employers—Wal-Mart and Target, most notably—are getting ahead of the kind of pressure currently facing McDonald's by raising their minimum wages. Ascension is the second major healthcare company to make the shift—Aetna raised its minimum hourly wage to $16 per hour in April, impacting approximately 5,700 employees, most of whom work in customer service, claims administration, plan sponsor eligibility and billing. Aetna notes that the increased hourly wage also gives employees the opportunity to earn higher bonuses and 401(k) contributions.
Ascension, like Aetna did when it made its announcement in January, hopes the move "will encourage other healthcare employers to choose to do the same," but don't expect a landslide. Humana CEO Bruce Broussard told Modern Healthcare at the time that it had no plans to match Aetna's new minimum wage.
Studies have shown that there is a financial incentive to boost base wages. In the retail industry, economists have compiled data validating the hypothesis that paying higher wages generates savings. According to the Peterson Institute, the cost-saving effects of higher wages include motivating employees to work harder; attracting more capable and productive workers; lower turnover; and enhancing quality and customer service.
Want to read more? You may enjoy this story on the Aetna wage hike, a first among health insurers.