NEW REPORT: The Healthcare Sector is Growing, But Workers Aren’t Sharing in the Gains

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Dan Beeton, 202-239-1460

NEW REPORT: The Healthcare Sector is Growing, But Workers Aren’t Sharing in the Gains

WASHINGTON - The healthcare sector is one of the most important sources of jobs in the economy. Healthcare spending reached $3.2 trillion in 2015, or 17.8 percent of GDP, and accounted for 12.8 percent of private sector jobs. It was also the only industry that consistently added jobs during the Great Recession, and grew 20 percent between 2005 and 2015. Despite this growth, wages have either declined or been stagnant over the past decade for healthcare workers in hospitals and outpatient centers.

A new report from the Center for Economic and Policy Research (CEPR), funded by the W.K. Kellogg Foundation with additional funding provided by the Nathan Cummings Foundation, describes the changing patterns of jobs and wages for healthcare workers, specifically in hospitals and outpatient clinics over the decade from 2005 to 2015. The healthcare sector has become more demographically diverse over the decade, but as jobs shift from hospitals to outpatient centers, wages are declining or stagnating, and inequality is increasing. (See healthcareworkers.us for more info and related blog posts.)

The report, “Organizational Restructuring in U.S. Healthcare Systems: Implications for Jobs, Wages, and Inequality,” provides a detailed breakdown of which groups of workers are experiencing stagnant or declining wages. For instance, the report finds that employment in outpatient centers has grown six times the rate of hospitals, but the only demographic group in these facilities to see wage gains is white men ― and these are modest. Some other highlights include:

  • Job growth in outpatient facilities was disproportionately high for black workers (65 percent growth rate), Hispanic workers (103 percent), and Asian/others (82 percent), and within these groups, women’s job growth outpaced that of men.
  • Overall median real hourly wages rose very modestly in hospitals, increasing by 75 cents over the decade from $23.79 to $24.54. This was an increase of 3.2 percent over the decade, or less than a third of a percent a year on average.
  • The findings in this report show that the unraveling of hospital-based employment systems is associated with greater wage inequality. Wages have declined over the decade in outpatient care facilities, with notable declines in the pay of black men employed as medical technicians or as health aides and assistants.  In hospitals, the rise in real wages among healthcare professionals and the modest fall in wages for non-professional groups suggest that inequality has increased within hospital settings.

Eileen Appelbaum, co-author of the report and Senior Economist at CEPR, stated: “Declining real wages in outpatient services cannot be explained by factors that often influence wage determination: educational level, age, or the share of workers who are part-time or foreign-born. Educational attainment rose for virtually every occupational group ― in some cases, substantially ― and is higher in outpatient care centers than in hospitals.”  

Rosemary Batt, co-author and Cornell University professor, points to institutional explanations such as changes in union density. “While union density increased among professional employees between 2005 and 2015, union density has fallen among non-professional employees, particularly in outpatient settings. This may have contributed to the decline in median real wages for these workers.”

For more on the report’s findings, including blog posts and related materials, see healthcareworkers.us.

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The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.

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