Healthcare’s Pandemic-Era Wage Growth Lagged Other U.S. Industries, Study Finds

Those working in the healthcare sector saw smaller average wage increases during the first 15 months of the pandemic compared to workers across other industries, according to a recent analysis of U.S. Bureau of Labor Statistics data.

Average wages in healthcare rose 5% from 2019 to 2020 while all industries’ average wages rose 6.7% during the same time, according to the study published Friday in JAMA Health Forum. The difference was broader when looking at the first six months of 2021, when healthcare and all industries’ average wage increases were 1.5% and 6.9%, respectively.

The study—conducted by Rand Corporation, University of Indiana and University of Michigan researchers—also reviewed changes in employment levels across healthcare and specific subsectors of the industry.

“While federal programs provided financial assistance to hospitals and institutions, it is important to focus on the effect of the pandemic on healthcare employment levels and wages, especially if we want to prevent such shortages in the future,” Christopher Whaley, Ph.D., a policy researcher at the Rand Corporation and a co-author, said in a statement.

Overall, healthcare employment dipped from 22.2 million in 2019 to 21.1 million halfway through 2020, a 5.2% decline, but then “considerably rebounded” up to 21.8 million by the middle of 2021. Across all industries, the Bureau of Labor Statistics data showed a 9% decline through the second quarter of 2020.

The researchers saw the largest 2020 healthcare employment declines among dentists’ offices (10%) and skilled-nursing facilities (SNFs). Conversely, hospitals (2.5%) and physicians’ offices (4.6%) retained the most workers.

SNFs still fared the worst during the first half of 2021’s employment rebound, seeing a 13.6% decline in workers compared to 2019. On the other hand, SNF workers who stuck around saw wage increases in 2020 (9.5%) and 2021 (6.3%) that outpaced those working at other types of care facilities.

Additionally, the researchers conducted an analysis looking at changes in employment against the physician-to-population ratio of individual counties.

Here, they found that the quintile of counties with the lowest ratio of physicians-to-population saw significantly worse employment rates than those in the highest quintile across dentists’ offices, physicians’ offices and SNFs, with the latter setting seeing the widest disparity. Differences across other settings such as hospitals were not statistically significant.

“Future research is needed to understand if organizations are demanding fewer workers or fewer workers are willing to work at health care positions,” the researchers wrote. “Overall, our results imply that intensified early efforts are needed to protect the health care workforce in future pandemics.”

The healthcare sector has been locked in a labor crisis that, at its worst, has driven some facilities to limit admissions or services due to short supply. Nursing home groups, in particular, have raised the alarm, with poll results from more than 14,000 nursing homes and long-term care facilities released in September by the American Health Care Association and National Center for Assisted Living suggesting 58% of nursing homes had to limit new admissions due to a lack of employees.

To stave off the pandemic era’s so-called “Great Resignation,” many healthcare organizations have publicized additional bonuses or benefits designed to increase retention or win over new employees. Contract labor has also become a mainstay for providers trying to plug holes in their staff, although high rates demanded during surges have driven up hospitals and others’ expenses and ignited accusations of price gouging.


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