ERLANGER, Ky. — The sleek corporate offices of one of Amazon’s air freight contractors looms over Villaspring of Erlanger, a stately nursing home perched on a hillside in this Cincinnati suburb. Amazon Prime Air cargo planes departing from a recently opened Amazon Air Hub roar overhead. Its Prime semi-trucks speed along the highway, rumbling the nursing home’s windows.
This is daily life in the shadow of Amazon.
“We haven’t even seen the worst of it yet,” said John Muller, chief operating officer of Carespring, Villaspring’s operator. “They are still finishing the Air Hub.”
Amazon’s ambitious expansion plans in northern Kentucky, including the $1.5 billion, 600-acre site that will serve as a nerve center for Amazon’s domestic air cargo operations, have stoked anxieties among nursing home administrators in a region where the unemployment rate is just 3%. Already buckling from an exodus of pandemic-weary health care workers, nursing homes are losing entry-level nurses, dietary aides and housekeepers drawn to better-paying jobs at Amazon.
The average starting pay for an entry-level position at Amazon warehouses and cargo hubs is more than $18 an hour, with the possibility of as much as $22.50 an hour and a $3,000 signing bonus, depending on location and shift. Full-time jobs with the company come with health benefits, 401(k)s and parental leave. By contrast, even with many states providing a temporary covid-19 bonus for workers at long-term care facilities, lower-skilled nursing home positions typically pay closer to $15 an hour, often with minimal sick leave or benefits.
Nursing home administrators contend they are unable to match Amazon’s hourly wage scales because they rely on modest reimbursement rates set by Medicaid, the government program that pays for long-term care.
Across the region, nursing home administrators have shut down wings and refused new residents, irking families and making it more difficult for hospitals to discharge patients into long-term care. Modest pay raises have yet to rival Amazon’s rich benefits package or counter skepticism about the benefits of a nursing career for a younger generation.
“Amazon pays $25 an hour,” said Danielle Geoghegan, business manager at Green Meadows Health Care Center in Mount Washington, Kentucky, a nursing home that has lost workers to the Amazon facility in Shepherdsville. The alternative? “They come here and deal with people’s bodily fluids.”
The nursing home industry has long employed high school graduates to feed, bathe, toilet and tend to dependent and disabled seniors. But facilities that sit near Amazon’s colossal distribution centers are outgunned in the bidding war.
“Chick-fil-A can raise their prices,” said Betsy Johnson, president of the Kentucky Association of Health Care Facilities. “We can’t pass the costs on to our customer. The payer of the service is the government, and the government sets the rates.”
And while gripes about fast-food restaurants having to close indoor dining because of a worker shortage have ricocheted around Kentucky, Johnson said nursing homes must remain open every day, every hour of the year.
“We can’t say, ‘This row of residents won’t get any services today,’” she said.
Nationwide, long-term care facilities are down 221,000 jobs since March 2020, according to a recent report from the American Health Care Association and National Center for Assisted Living, an organization that represents 14,000 nursing homes and assisted living communities caring for 5 million people. While many hospitals and physicians’ offices have managed to replenish staffing levels, the report says long-term care facilities are suffering a labor crisis worse “than any other health care sector.” Industry surveys show 58% of nursing homes have limited new admissions, citing a dearth of employees.
Kentucky and other states are relying on free or low-cost government-sponsored training programs to fill the pipeline with new talent. Luring recruits falls to teachers like Jimmy Gilvin, a nurse’s aide instructor at Gateway Community and Technical College in Covington, Kentucky, one of the distressed River Cities tucked along the Ohio River.
On a recent morning, Gilvin stood over a medical dummy tucked into a hospital bed, surrounded by teenagers and young adults, each toting a “Long-Term Care Nursing Assistance” textbook. Gilvin held a toothbrush and toothpaste, demonstrating how to clean a patient’s dentures — “If someone feels clean, they feel better,” he said — and how to roll unconscious patients onto their side.
The curriculum covers the practical aspects of working in a nursing home: bed-making, catheter care, using a bedpan and transferring residents from a wheelchair to a bed.
“It takes a very special person to be a certified nursing assistant,” Gilvin said. “It’s a hard job, but it’s a needed job.”
Over the past five years, Gilvin has noticed sharp attrition: “Most of them are not even finishing, they’re going to a different field.” In response, nursing schools are reaching further upstream, recruiting high school students who can attend classes and graduate from high school with a nurse’s aide certificate.
“We’re getting them at a younger age to spark interest in the health care pathways,” said Reva Stroud, coordinator of the health science technology and nurse’s aide programs at Gateway.
Stroud has watched, with optimism, the hourly rate for nurse’s aides rise from $9 an hour to around $15. But over the years that she’s directed the program, she said, fewer students are choosing to begin their careers as aides, a position vital to nursing home operations. Instead, they are choosing to work at Walmart, McDonald’s or Amazon.
“There is a lot of competition for less stress,” Stroud said. A staunch believer in the virtue of nursing, she is disheartened by the responses from students: “‘Well, I could go pack boxes and not have to worry about someone dying and make more money.’”
Even for those who want a career in nursing, becoming a picker and packer at Amazon carries strong appeal. The company covers 100% of tuition for nursing school, among other fields, and has contracted with community colleges to provide the schooling.
Amazon is putting Kayla Dennis, 30, through nursing school. She attended a nursing assistant class at Gateway but decided against a career as a nurse’s aide or certified nursing assistant. Instead, she works at the Amazon fulfillment center in Hebron, Kentucky, for $20.85 an hour with health insurance and retirement benefits while attending school to become a registered nurse, a position requiring far more training with high earning potential.
“Amazon is paying 100% of my school tuition and books,” Dennis said. “On top of that, they work around my school schedule.”
Waiting for a Rising Tide
The nursing home workforce shortages are not a top concern for the state and local economic development agencies that feverishly pursue deals with Amazon. Cities nationwide have offered billions of dollars in tax breaks, infrastructure upgrades and other incentives to score a site, and the spoils abound: Amazon has opened at least 250 warehouses this year alone.
Amazon has been a prominent force in northern Kentucky, resurfacing the landscape with titanic warehouses and prompting pay bumps at Walmart, fast-food franchises and other warehouse companies. The company has “made significant investments in our community,” said Lee Crume, chief executive officer of Northern Kentucky Tri-County Economic Development Corp. “I’m hard-pressed to say something negative.”
Amazon representatives did not respond to interview requests for this story.
Some labor experts said Amazon’s “spillover effect” — the bidding up of wages near its hubs — suggests companies can afford to compensate workers at a higher rate without going out of business.
Clemens Noelke, a research scientist at Brandeis University, said that is true — to a point. Because Amazon draws workers indiscriminately from across the low-wage sector, rather than tapping into a specific skill profile, it is hitting sectors with wildly different abilities to adapt. Industries like nursing homes, home health care agencies and even public schools that rely on government funding and are hampered in raising wages are likely to lose out.
“There are some employers who are at the margin, and they will be pushed out of business,” Noelke said.
A survey conducted in November by the Kentucky Association of Health Care Facilities found 3 in 5 skilled nursing facilities, assisted living communities and care homes were concerned about closing given the number of job vacancies.
The solutions proffered by state legislators rely largely on nurse training programs already offered by community colleges like Gateway. Republican Rep. Kimberly Poore Moser, a registered nurse who chairs the state’s Health and Family Services Committee, said that while legislators must value health care jobs, “we have a finite number of dollars. If we increase salaries for one sector of the health care population, what are we going to cut?”
Moser said Kentucky’s bet on Amazon will pay off, eventually. “The more we inject into our economy, the more our Medicaid budget will grow,” she said.
That confidence in a rising-tide-lifts-all-boats approach frustrates Johnson, president of the Kentucky Association of Health Care Facilities. Lawmakers have difficulty grasping the complexity of financing a nursing home, she said, noting that Kentucky’s Medicaid reimbursement rates stagnated at a one-tenth of 1% increase for five years, before receiving a larger increase to offset inflation the past two years.
The Biden administration’s Build Back Better Act, still before Congress, would infuse billions of dollars into in-home care and community-based services for seniors, largely through federal Medicaid payments. It includes funding aimed at stimulating recruitment and training. But the measure is focused largely on expanding in-home care, and it’s not clear yet how it might affect nursing home pay rates.
For now, the feeding frenzy continues. Just off Interstate 65 in Shepherdsville, Wendy’s, White Castle and Frisch’s Big Boy dangle offers of “work today, get paid tomorrow.” FedEx signs along the grassy medians that once advertised $17 an hour are stickered over with a higher offer of $23. The colossal Amazon warehouse bustles with workers in yellow safety vests.
And in nearby Mount Washington, Sherrie Wathen, administrator of the Green Meadows nursing home, strains to fill a dozen vacancies, knowing she can’t match Amazon’s package for her entry-level slots. Instead, Wathen, who began her own nursing career at 18, tells prospective employees to consider life at a factory: “You’re going to have the same day over and over.”
At the nursing home, she said, “I am the only family this lady has. I get to make an impact rather than packing an item in a box.”