The healthcare sector saw a significant drop in employment at the start of the pandemic, but since then, the industry has largely rebounded to pre-pandemic levels. However, overall job growth remains below expectations, according to new research from the Peterson Center on Healthcare and the Kaiser Family Foundation.
How the pandemic has impacted healthcare employment, wages
For the study, researchers analyzed data from the U.S. Bureau of Labor Statistics' Current Employment Statistics and Job Openings and Labor Turnover Survey to compare the healthcare industry and non-healthcare sectors, as well as how different healthcare providers were affected by the pandemic.
Typically, the healthcare industry has been "relatively recession-proof," the researchers write. However, at the start of the pandemic in 2020, healthcare jobs saw a significant decline, though it was not as steep as the rest of the economy.
Between April 2019 and April 2020, health employment decreased by 8.2% while non-health employment decreased by 14%. Over time, jobs across all sectors rebounded, with healthcare jobs doing so more quickly. By July 2020, the healthcare industry was already reporting 95% of its pre-pandemic job numbers. In comparison, non-healthcare jobs did not reach 95% of pre-pandemic levels until June 2021.
As of December 2022, jobs in the healthcare industry are 1.2% higher than they were in February 2020, the previous peak. Across all other sectors, jobs are 0.8% higher than in February 2020.
Among the different health service sectors, most saw their job numbers begin to increase again by the summer of 2020, and this upward trend has largely continued over time. However, some sectors, including community care facilities for the elderly and nursing care facilities, are still seeing job numbers far below their pre-pandemic levels.
As of December 2022, community elder care facilities have 6.5% fewer employees nationwide than in February 2020, and nursing care facilities have 13.3% fewer employees.
While many healthcare sectors have seen their employment numbers return to pre-pandemic levels, overall employment in the healthcare industry is 3.9% below what was originally projected based on pre-pandemic growth rates. The difference between the actual and projected employment numbers ranged from no difference in physicians' offices to -12.5% in community elder care facilities.
Meanwhile, the number of health and social assistance job openings have continued to grow since April 2020, hitting a record high in September of that year. Compared to before the pandemic, healthcare and social assistance job openings remain significantly higher.
In addition, the number of job quits in the healthcare and social assistance industry has increased at a faster rate than all job quits. By November 2022, job quits in the healthcare industry were 32.5% higher than before the pandemic, compared to a 21.1% increase in job quits among all workers.
When it comes to average wages, healthcare jobs have seen increases that largely align with those of all employees at private organizations. Although average healthcare wages initially rose more slowly compared to overall wages, healthcare wages have now been increasing slightly faster than overall average weekly earnings since mid-2021.
Between February 2020 and November 2022, overall average weekly wages increased by 14.6%, going from $982 to $1,126. In comparison, the average weekly wage for healthcare employees increased by 17% during the same period, going from $1,039 to $1,216.
However, the increase in average healthcare wages was not evenly distributed across different settings. For example, nursing home and elder care facilities saw the largest decline in employment, but saw the highest average increase in wages at 21.8% and 20.5%, respectively.
In comparison, physician offices, which saw the largest increase in employment during the pandemic, had lowest average increase in wages at 10.9%.
Overall, "[t]he COVID-19 pandemic, and the rapid subsequent changes of both supply and demand in the labor market, will continue to have an impact on employment the health industry (and the overall economy) for years to come," the researchers wrote. (Telesford et al., Peterson-KFF Health System Tracker, 1/20)