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 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 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.
Interestingly, 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 8.13% from the previous year (an unprecedented drop), while non-health employment fell by over 13%. Total health employment in February 2020 was 16.5 million and dropped to 14.9 million in April.
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 July 2022, the number of Americans employed in the health sector remains 0.5% lower than in February 2020 (the previous peak). For the first time since the pandemic, employment in non-healthcare jobs are above February 2020 levels, i.e., 0.08% higher.
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 July 2022, physicians’ offices, outpatient care centers and home health services employed more people than they had in February 2020, and hospitals were within 2% of their pre-pandemic employment level. 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 976,100 employees nationwide in February 2020, but only 892,200 in July of 2022- an 8.6% 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 14.1% drop in employment since February of 2020, with decreasing employment every month until March 2022, when employment begun to increase. (Note that Current Employment Survey data from the most recent two months is preliminary and subject to change).
Some states have established COVID-19 vaccination mandates for employees in nursing homes. Initially, it was unclear if these mandates would cause mass resignations and worsen the staff shortage. However, a recent study found that vaccination mandates did not significantly impact staff shortages in nursing homes through the second half of 2021.
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, 1.55 million Americans were employed in home health services in February 2020, versus 1.57 million in July 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 0.28% per month. If this growth had continued from 2020 throughout 2022, home health service employees would number 1.68 million in July 2022, rather than 1.57 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. Nursing homes employed 1.36 million people in July 2022, which is 12% less than the projected 1.55 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 March 2022. Even after a decline in April 2022, job openings in healthcare and social assistance are 80% 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 June 2022, healthcare and social assistance job quits had increased to 23.8% higher than they had been before the pandemic, which is slightly above the number of job quits among all workers in the same period (23%).
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 November 2021. Since that point, quits have declined slightly, though are still significantly higher than they were prior to the pandemic.
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 as of July 2022.
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 3.0% in July 2022, versus 3.5% in February 2020. By contrast, women in the non-hospital healthcare field saw an increase in unemployment from 2.3% to 3.6% between February 2020 and July 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 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 mid-2021, health sector wages have increased slightly faster than overall average weekly earnings. Average weekly wages for employees of private organizations increased by 13.1%, from $982.46 in February 2020 to $1,111.35 in June 2022, while healthcare employee average wages, always slightly higher, have increased 15.4%, from $1,039.37 before the pandemic to $1,199.74 in June 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.
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 20.9% between February 2020 and June 2022, from $672 to $812 per week. Similarly, wages of elder care facility workers increased from about $604 to $717 (18.8%).
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 10.3% between February 2020 and June 2022, from $1,450 to $1,600 per week. Wages of hospital workers saw a 15.7% increase between February 2020 to June 2022, from $1268 to $1467 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.