In recent years, the health care industry kept on chugging along, creating jobs - including many with quite decent levels of pay - while the broader economy tanked, and has been slow to resume growth. Employment levels for the broad economy aren't expected to return to the pre-recession peak until the end of 2014. In fact, Oregon had about the same number of jobs in 2011 as in 2000, and the private sector actually lost 1 percent during that decade-plus time frame.
As the broad economy stagnated, health care employment surged 36 percent between 2000 and 2011. Graph 1 shows annual employment growth back to the turn of the 21st century, for the private sector and for the health care industry. The private sector has seen ups and downs, while the dark bars for health care employment show increases year after year.
So where have all the health care workers come from? Is it possible that some laid-off workers made a transition to health care payrolls as other industries slowed down?
There is a source that lets us dig into questions like this: the Oregon Employment Department's Unemployment Insurance (UI) wage records. These data are collected as part of the unemployment insurance program and provide information on workers' wages, hours worked, and industries of employment for all workers covered by UI. Using these administrative wage record files, it is possible to match today's health care workforce with the workforce just before the Great Recession took hold at the end of 2007.
In the fourth quarter of 2011, 179,824 Oregon workers held jobs in the health care industry. More than half of them (57%) were already working in health care when the Great Recession hit in the fourth quarter of 2007 (Table 1).
What may surprise many readers is the number of Oregon's health care workers that were not in Oregon wage records four years ago - that is the situation for 25 percent of health care workers in fourth quarter 2011. What does that mean? There are lots of reasons a worker could be in recent wage records without a long history there, and unfortunately there's no way to tease out from wage record data the dominant reason for workers joining the health care payrolls. Workers who did not appear in Oregon wage records in fourth quarter 2007 could have still been in school and not yet in the labor force; they could have been out of the labor force temporarily; or they could have moved to the state since 2007.
Also, wage file data does not tell us about occupational mix - so it is hard to know whether workers who appear in health care wage records by late 2011 retrained for a new career after leaving other industries, or whether they're doing similar work in a different firm and industry.
Newer health care workers came most frequently from retail trade, and leisure and hospitality. It's possible these workers were in some sort of health care training and holding part-time jobs while in school, as leisure and retail are two industries with lots of part-time and shift work that students can fit into their schedules.
Professional and business services was the prior industry of employment for 4,800 of Oregon's health care workers in fourth quarter 2011. That may be an area for high cross-over of skills with health care administration. Also, a subsector of the industry is professional, scientific, and technical services - and workers doing health care research and development could conceivably move between the industries depending on who is currently paying their wages, with little difference in job duties.
Another 4,500 workers moved in recent years from state and local government to health care. Of those, 479 worked in a health care function of government before transitioning to the private sector.
However, we haven't really seen the potential effect of workers moving from declining industries to health care. Manufacturing and construction were the hardest hit industries in the Great Recession, but few of these workers left to join the health care payrolls. Workers in manufacturing at the start of the recession accounted for 2,400 health care workers, or 1.4 percent of the health care workforce. Construction accounted for just 0.6 percent of today's health care workers, with 1,000 transitioning into health care over the past four years. Now, because these industries share little in the way of skills with health care, it is possible that more will show up in a future analysis once they've completed training for their new careers.
|Where Were Today's Health Care Workers|
|When the Great Recession Started?|
|4Q2007 Industry of Employment||Number of Workers||Percent of Total|
|Leisure and Hospitality||5,397||3.0%|
|Professional and Business Services||4,841||2.7%|
|State and Local Government||4,531||2.5%|
|Transportation, Warehousing, and Utilities||594||0.3%|
|Natural Resources and Mining||252||0.1%|
|Workers not in Oregon wages reported 4q2007||44,582||24.8%|
|Total workers in Health Care in 4q2011||179,824||100.0%|
Wage gains for those who worked in another industry at the start of the Great Recession were heartening. Mean wages for those workers increased by more than one-quarter after their transition to health care. Median wages increased 22 percent. Take a look at the levels in Table 2, though: for workers in health care during both periods, the median wage in fourth quarter 2011 was $25.71. For those entering health care from another industry over the four-year period, the median in fourth quarter 2011 was significantly lower, at $14.56.
This group of workers - those who transitioned to health care after the onset of the Great Recession - started with wages lower than the average for Oregonians, and they've begun to close the gap with their new careers. In fourth quarter 2007, the group had wages that were 74 percent of the median for all Oregonians. By fourth quarter 2011, the group's median wage was 83 percent of the median for all Oregonians.
|Change in Hourly Wages, Fourth Quarter 2007 to Fourth Quarter 2011|
|Fourth Quarter 2007||Fourth Quarter 2011||Percent Change|
|Health Care Industry in Both Quarters||Mean||$42.52||$45.38||6.7%|
|Different Industry in Fourth Quarter 2007||Mean||$18.65||$23.81||27.7%|
|Not in Oregon Wage Records||Mean||NA||$35.67||NA|
Many jobs in the health care industry don't deal directly with patient care or require health care training. Business operations of a hospital require workers in many roles that aren't specific to health care, such as purchasing agents, receptionists, office workers, janitors, and food preparation workers. Workers transitioning to health care may not need retraining to pursue those new roles if the jobs are similar to what they used to do in another industry. On the other hand, a manufacturing worker who left that declining industry to pursue a new career as a nurse does need retraining - a significant amount of it. That means there's also a time lag between pursuing the new career and actually appearing in industry wage records. There are almost certainly more workers currently retraining from declining industries that we haven't seen show up in health care wage records yet.