The economic impacts of the early pandemic have begun to recalibrate as the nation’s businesses reopen. 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 utilization levels 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 Survey (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 the healthcare industries.
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, for example, health sector jobs continued to rise even as most other sectors saw significant layoffs. Ironically, 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. In April of 2020, health employment fell by 9.3% from the previous month (an unprecedented drop), while non-health employment fell by over 14%.
After a sharp drop at the beginning of the pandemic, jobs in both the health and non-health sectors have begun to return. Employment had begun to rise again 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 November 2021, the number of Americans employed in the health sector remains 2.7% lower than in February 2020 (the previous peak). For those in non-healthcare jobs, employment is 2.5% lower.
Nursing homes and community care facilities show continued decreases in employment while other components have nearly recovered
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 November of 2021, outpatient care centers and physician’s offices employed more people than they had in February 2020, and hospitals and home healthcare organizations were within 2% of their respective pre-pandemic employment numbers. However, as we show in the next chart, employment in these industries is still below expected levels, given pre-pandemic upward trends.
The number of workers employed at nursing care and elder care facilities has continued to decline. Community elder care facilities had 976,100 employees nationwide in February 2020, but only 867,700 in November of 2021 – a 11.1% decrease – and the number of employees has continued to drop every month. Nursing care facilities have seen a 15.0% drop in employment since February of 2020, from 1.59 million to 1.35 million in November 2021, with decreasing employment nearly every month. (Note that Current Employment Survey data from the most recent two months is preliminary and subject to change).
Health sector employment remains below expectations, particularly for home health services 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, had the pandemic not happened. As an example, 1.55 million Americans were employed in home health services in February 2020, versus 1.53 million in November 2021. This represents a recovery of most 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 0.28% per month. If this growth had continued throughout 2020 and 2021, home health service employees would number 1.64 million in November 2021, rather than 1.53 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 0.09% per month. However, the pandemic accelerated this decline. Nursing homes employed 1.35 million people in November 2021, which is 13.4% less than the projected 1.56 million in the absence of a pandemic.
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 and is now 51.9% higher than before the pandemic.
Job quits hit all-time highs in all sectors, including health & social assistance
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 October 2021, healthcare and social assistance job quits had increased to 35% higher than they had been before the pandemic, slightly higher than the increase of quits among all workers in the same period (29%).
The increase in job quitting among healthcare workers has received attention in the media, though a large number of workers are quitting jobs across all industries (the “great resignation”) – in fact, quit rates were at the highest levels ever recorded in October 2021.
Unemployment rates among non-hospital health workers have increased for women and decreased for men
The unemployment rate during the pandemic among healthcare workers varies by sex, as well as the location of the individual’s usual employment. Hospital workers, both male and female, have seen unemployment rates return to roughly pre-pandemic levels or below by November 2021.
However, outside of hospitals, trends in the healthcare unemployment rate for women is very different from that for men. Men have seen a decline in the unemployment rate since the start of the pandemic, with a rate of 2.9% in November 2021, versus 3.5% in February 2020. By contrast, women in the non-hospital healthcare field saw an increase in unemployment from 2.3% to 3% between February 2020 and November 2021.
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 first months of the pandemic, average healthcare wages rose slowly compared to overall workforce wages, as low-wage workers in non-healthcare industries were disproportionately pushed out of the labor force thus driving the average wage higher. However, since January 2021, healthcare and overall average weekly earnings have risen at roughly the same rate. Average weekly wages for employees of private organizations increased by 9.5%, from $980.74 in February 2020 to $1073.97 in October 2021, while healthcare employee average wages, always slightly higher, have increased 10.8%, from $1,037.00 before the pandemic to $1,148.44 in October 2021.
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.
Home- and community-based care employees have seen higher average wage increases than employees who work in a clinical setting
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 over 14.7% between February 2020 and October 2021, from $669.90 to $768.56 per week. Similarly, wages of home healthcare workers increased from $586.46 to $667.29 (13.8%).
However, changes in average wages could reflect changes in the distribution of workers. If more low-wage workers are unemployed, the average wage will appear higher, even if wages do not rise for the remaining employees. Areas quickest to recover employees and return to pre-pandemic employment rates, such as physician offices, have seen the slowest wage growth since February 2020, at 5.6%.
The economic recovery is not complete in the healthcare industry (nor in the economy as a whole). 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 high unemployment 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 long-term effects on the health sector labor market from the pandemic are unknown, but changes in the delivery of healthcare (such as the growth of telehealth) may lead to lasting shifts in the health industry. Further research is needed to understand the motivations of employees when choosing to accept or leave jobs, as well as how the pandemic has shifted the supply of, and demand for, healthcare workers in the long-term.
Paul is an independent consultant. Emma, Krutika, and Cynthia are with KFF.
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.