Seniors Housing Weekly Update - Will Seniors Housing Face Rising Costs?
September 3, 2013
Will Seniors Housing Face Rising Costs?
Some of us with deadlines had to labor on Labor Day, but the seniors housing industry should have been paying attention to some of the labor protests and work stoppages last week in the fast food industry. As you should know by now, they want their minimum wage rate to increase from $7.25 per hour up to $15.00 per hour. While that’s not going to happen, mostly because their prices would become unaffordable for many of their customers, at some point there is going to be renewed wage pressure on the senior living sector. And as an employee, working in a hotel or even a restaurant has to be less stressful than cleaning up after a 90-year old resident. Let’s face it, not many people want a minimum wage job, and when the economy improves, there is bound to be some wage pressure. Add to this the employer mandate for health insurance that has been postponed for a year, and you may be seeing some real hits to the bottom line in 2015. Apparently, the health insurance mandate could result in a 3% to 6% EBITDA hit for some companies. And with rising interest rates, the timing could not be worse.