As with the rest of the economy, the health sector saw a sharp drop in revenues and employment at the onset of COVID-19 in the spring of 2020. Health services utilization dropped precipitously as providers cancelled elective care and patients practicing social distancing avoided health facilities. Utilization of health services has remained somewhat lower than expected based on the trend in years before the pandemic, and health sector employment remains below pre-pandemic levels.
This chart collection uses the Bureau of Labor Statistics’ Current Employment Statistics (CES) and Job Openings and Labor Turnover Survey (JOLTS) data to analyze how jobs and wages in the healthcare industry have recovered compared to the non-healthcare sectors, and how this recovery is distributed across healthcare providers.
Unlike during past recessions, health employment fell drastically in early 2020
In the past, health sector jobs have been relatively recession-proof. During the Great Recession (from December 2007 through June 2009), for example, health sector employment continued to increase – from 13.1 million in December 2007 to 13.4 million in December 2008, and then 13.7 million in December 2009 – even as most other sectors saw significant declines.
The COVID-19 recession was markedly different – as lockdowns spread across the country, health sector jobs fell sharply along with jobs in other sectors. Even so, health sector employment did not fall quite as steeply as jobs in the rest of the economy. From April of 2019 to April 2020, health employment fell by -8.2% (from 16.2 million to 14.9 million), while non-health employment fell by -14.0%. Total health employment in February 2020 was 16.5 million.
After this unprecedented drop at the beginning of the pandemic, jobs in both the health and non-health sectors sharply rebounded. Employment had begun to rise in both sectors by May 2020, though while the pandemic recession is over, recovery is incomplete. The health industry had reported 95% of pre-pandemic job numbers by July of 2020, but non-healthcare jobs did not return to 95% of pre-pandemic levels until almost a year later in June 2021.
As of December 2022, the health sector added 54,700 jobs over the previous month. Jobs in the health sector are 1.2% higher than in February 2020 (the previous peak). Comparatively, jobs in all other sectors are 0.8% higher than in February 2020.
Nursing home and elderly care employment remain below February 2020 levels
While all health service industries had sharp drops in employment at the beginning of the pandemic, most had seen an upturn in jobs by the summer of 2020 – an upward trajectory that has largely continued to the present. By December 2022, physicians’ offices, outpatient care centers, home health services, and hospitals employed more people than they had in February 2020. However, as we show in the next chart, employment in these industries is still below expected levels, given pre-pandemic trends.
The number of workers employed at nursing care and elder care facilities continues to remain significantly below pre-pandemic levels. Community elder care facilities had 976,300 employees nationwide in February 2020, but only 913,200 in December of 2022- an -6.5% decrease. Employment in these facilities reached a low of 869,400 in November of 2021 and has been growing slightly since. Nursing care facilities have seen a -13.3% drop in employment since February of 2020. (Note that Current Employment Statistics data from the most recent two months is preliminary and subject to change).
Health sector employment remains below expectations, particularly for nursing care and community care centers for the elderly
While health employment in many facilities has nearly returned to pre-pandemic levels, the effects of the pandemic linger. Employment in most areas had been growing steadily before March 2020, and jobs have not yet returned to where they likely would have been, based on pre-pandemic job growth rates. As an example,1.54 million Americans were employed in home health services in February 2020, versus 1.60 million in December 2022. This represents a recovery of all jobs lost at the beginning of the pandemic. However, between 2017 and early 2020, employment in home health had been growing at an average rate of 0.3% per month. If this growth had continued from 2020 through most recent month, home health service employees would number 1.70 million in December 2022, rather than 1.60 million.
Employment had been growing in every health service industry between 2017 and early 2020 except for nursing care facilities, where the number of workers had been declining at an average rate of -0.1% per month. Nursing homes employed 1.37 million people in December of 2022, which is -10.5% below the projected 1.54 million.
Job openings in the health sector, like the rest of the economy, are higher than pre-pandemic levels
The Job Opportunity & Labor Turnover Survey (JOLTS) does not differentiate between healthcare and social assistance positions in monthly data, but it does show that the combined number of health and social assistance job openings has been increasing since April 2020, hitting a record high in September 2022. Even after a decline in April 2022, job openings in healthcare and social assistance are higher than before the pandemic.
Recently, health and social assistance job quits have increased faster than all job quits
At the beginning of the pandemic, the number of workers quitting their jobs declined sharply. Since the beginning of 2021, workers have been leaving their jobs at higher rates than they had been before the pandemic started. By November 2022, healthcare and social assistance job quits had increased to 32.5% higher than they had been before the pandemic, job quits among all workers in the same period had increased to 21.1%.
Unemployment rates for men and women in healthcare vary following the pandemic
The unemployment rate during the pandemic among healthcare workers varies by sex, as well as the healthcare setting of the individual’s usual employment. Female hospital workers have seen a decline in unemployment from 1.4% in February 2020 to 0.7% in December 2022. Male hospital workers have experienced an increase in unemployment at 1.5% in February 2020 to 2.9% in December 2022.
Outside of hospitals, trends in the healthcare unemployment rate for men has declined rate since the start of the pandemic, with a rate of 3.5% in February 2020, versus 1.6% in December 2022. Women in non-hospital health services saw an increase in unemployment from 2.3% to 2.7% between February 2020 and December 2022.
Average weekly earnings have increased steadily among all employees, including health sector employees, since the beginning of the pandemic
Since February 2020, healthcare jobs have seen average wage increases that mirror those among all employees of private organizations. In the early months of the pandemic, average healthcare wages rose slowly compared to overall workforce wages, as low-wage workers in non-health industries were disproportionately pushed out of the labor force thus driving the average wage higher. However, since mid-2021, health sector wages have increased slightly faster than overall average weekly earnings. Average weekly wages for employees of private organizations increased by 14.6% from $982 in February 2020 to $1,126 in November 2022, while healthcare employee average wages, always slightly higher, have increased 17.0%, from $1,039 before the pandemic to $1,216 in November 2022.
Increases in the average wage do not necessarily translate to higher pay for a given worker, and instead could be driven by changes in the distribution of high or low wage workers. An increase in unemployed low-wage workers would make the average wage higher. Also, these are nominal wages and thus do not account for inflation’s impact on purchasing power.
Health sector employees have seen varying increases in wages following the pandemic
The upward trend in average health sector wages has been unequally distributed among health settings. Nursing home and elder care facility employees have seen the largest drop in employment in the aftermath of the pandemic; they have also seen the highest average wage increases. Among nursing home employees, average earnings rose by 21.8% between February 2020 and November 2022, from $672 to $819 per week. Similarly, wages of elder care facility workers increased from $604 to $728 (20.5%).
Alternatively, offices of physicians which saw the largest rise in employment following the pandemic have seen the lowest average wage increases. Average earnings rose by 10.9% between February 2020 and November 2022, from $1,450 to $1,608 per week. Wages of hospital workers saw a 16.9% increase between February 2020 to November 2022, from $1,268 to $1,482 per week.
The 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. While hospitals and physician offices have returned to nearly pre-pandemic employment levels, industries such as elder care and nursing care continue to see relatively low employment. Average wages for these positions have increased significantly since the beginning of the pandemic, but this could be at least in part a function of fewer low-wage workers employed in those settings.
The United States saw a period of rapid consumer price growth in the first half of 2022. While inflation has not yet seriously impacted prices of health services, rising prices of other consumer goods has put upward pressure on wages for all workers, including those in the health sector.
The Peterson Center on Healthcare and KFF are partnering to monitor how well the U.S. healthcare system is performing in terms of quality and cost.