The theory is that underpaid caregivers have stresses in their own lives that can lead to not performing as well on the job. It also makes it more difficult to retain good, experienced caregivers who leave for better paying employment.
McKnight’s reported on this issue in “Underpaid nursing home aides lead to poor care, group says.”
There are a couple of counter arguments to this. Most importantly, data suggests that quality of care in nursing homes is generally going up despite the low wages paid to nursing assistants. Another problem is that if wages in nursing homes are increased, it is not clear where the money will come from and nursing homes are already very expensive and reliant on Medicaid funding.