Along 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.
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. In April of 2020, health employment fell to 14.9 million from 16.2 million in 2019 (by -8.2%), 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. While the pandemic recession is over, recovery was 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 June 2023, the health sector added 41,100 jobs over the previous month. Jobs in the health sector are 2.2% higher than in February 2020 (the previous peak), compared to 2.6% in all other sectors.
Skilled nursing care 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 June 2023, 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 following charts , employment in these industries is still below expected levels, given pre-pandemic trends.
The number of workers employed at skilled nursing care and elder care facilities continues to remain significantly below pre-pandemic levels. Employment in community and assisted living elder care facilities reached a low of 870,000 in January of 2022 and has been growing slightly since. However, these facilities had 976,500 employees nationwide in February 2020, but only 946,000 in June of 2023 – a 3.1% decrease. Nursing care facilities have seen an 11.1% 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).
Overall health sector employment remains below trends seen before the COVID-19 pandemic
If health sector employment had continued to grow at pre-pandemic rates, overall health employment would have seen 655,300 more jobs in June 2023.
Health sector employment remains below pre-pandemic trends, particularly for elderly care facilities, skilled nursing facilities, and outpatient care centers
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 1.61 million in June 2023. 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 1.73 million in June 2023, rather than 1.61 million.
Employment had been growing in every health service industry between 2017 and early 2020 except for skilled nursing facilities, where the number of workers had been declining at an average rate of -0.1% per month. Skilled nursing facilities employed 1.41 million people in June of 2023, which is -7.4% below the projected 1.52 million had pre-pandemic trends continued.
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 have increased since April 2020, hitting a record high in 2022. Even after a decline at the end of 2022, job openings in healthcare and social assistance are more than 50% higher than before the pandemic.
Health & social assistance job quits are at an all-time high
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 May 2023, healthcare and social assistance job quits had increased to 29.2% higher than they had been before the pandemic, which is about double the change in job quits among all workers in the same period (all job quits have increased by 15.0%).
The increase in job quits 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, quit rates have declined slightly, though are still significantly higher than they were prior to the pandemic.
Unemployment rates among non-hospital and hospital workers varies by sex
The unemployment rate during the pandemic among healthcare workers varies by sex, as well as the location of the individual’s usual employment. Hospital and non-hospital health services workers of both sexes have seen unemployment rates return to roughly pre-pandemic levels.
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, 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 16.9% from $982 in February 2020 to $1,148 in May 2023, while healthcare employee average wages, always slightly higher, have increased 19.3%, from $1,039 before the pandemic to $1,239 in May 2023.
Increases in the average wage do not necessarily translate to higher pay for an average worker. Average wage increases could be driven by changes in the distribution of high- or low-wage workers. A decline in employed low-wage workers would make the average wage higher. It is important to note that nominal wages and 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. Skilled nursing and elder care facility employees have seen the slowest recovery in employment in the aftermath of the pandemic, and they have also seen the highest average wage increases. Among skilled nursing facility employees, average earnings rose by 23.7% between February 2020 and May 2023, from $671 to $830 per week. Similarly, wages of elder care facility workers increased from $603 to $736 (22.0%).
Alternatively, offices of physicians – which saw one of the largest rises in employment following the pandemic – have seen the lowest average wage increases. Average earnings rose by 12.1% between February 2020 and May 2023, from $1,445 to $1,620 per week. Wages of hospital workers saw a 20.1% increase between February 2020 and May 2023, from $1,268 to $1,523 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 in the health industry (and the overall economy) for years to come. While hospitals and physicians’ offices have returned to pre-pandemic employment levels, industries such as elder care and skilled nursing care facilities continue to see relatively low employment. Average wages for health sector 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 2021 and 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.