FacebookTwitterRedditEmail

Rapid Job Growth, More Education Fail to Translate into Higher Wages for Health Care Workers

Health care, an important source of jobs in the US economy, accounts for nearly 13 percent of private sector employment. Unfortunately, despite rapid job growth in the sector, we’ve also seen wages of many healthcare workers in this critical area of our economy stagnate. Understanding this phenomenon and the factors that may have caused it, including decreased union participation and a shift in bargaining power from workers to employers is important for boosting health sector wages and potentially understanding some of the sources of growing inequality in our broader economy.

Since 2005, employment in health care grew by 20 percent. Hospitals provide the lion’s share of jobs but grew by just 10 percent. The much smaller outpatient care segment grew six times faster, with employment increasing by nearly 60 percent. In 2015, the 5 million health care professionals were outnumbered by 5.5 million workers in two non-professional occupational groups — 2.1 million medical technicians and 3.4 million health aides and assistants.

Although robust job growth persisted through the financial crisis and beyond, wages of non-professional health care workers have stagnated. Median real wages of medical technicians working full-time in hospitals fell from $22.00 in 2005 to $21.60 in 2015; in outpatient facilities, their pay fell from $17.84 to $17.67.

Education is often seen as something of a panacea for higher wages but here it does not seem to be the culprit. Improvements in educational attainment for health aides and assistants over the 2005–2015 decade were dramatic. Many of these workers were poorly educated in 2005 — 41.4 percent in hospitals and 32.5 percent in outpatient facilities had a high school degree or less. By 2015, these shares had fallen to 29.4 percent in hospitals and 22.9 in outpatient care.

The share of these workers with some college education rose from 48.4 to 56.5 percent in hospitals and from 55.2 to 59.4 percent in outpatient facilities. By 2015, 62.5 percent of health aides and assistants in hospitals had some college or a four-year degree; more than three-quarters (77.1 percent) in outpatient care had this level of educational achievement.

Nevertheless, median real wages of full-time, full-year workers fell from $14.87 to $14.72 in hospitals and rose by a penny from $14.27 to $14.28 in outpatient facilities over the decade. Despite rapid advances in education, these workers were still earning less than $15-per-hour in 2015.

Rapid job growth and rising levels of education are often presented by policymakers as the cure for low wages. But the experiences of health care workers challenge this conventional wisdom. What, then, can explain the failure of wages to increase despite rising employment and educational levels?

The change in union density in these occupations may be one factor. The Bureau of Labor Statistics reports that union density for support occupations, which includes medical technicians and health aides and assistants, fell slightly from 13.0 percent to 12.6 percent in hospitals over the 2005–2015 decade. In outpatient care facilities, however, union density fell sharply, from 10.0 to 4.5 percent during the same period. Unions maintained membership in outpatient facilities, but the rapid growth in employment in this health care segment meant a steep decline in density. This fall in union density is a likely contributor to the stagnant wages of non-professional workers, and for the lower wages paid in outpatient care facilities compared to hospitals.

Another factor holding down workers’ wages may be an increase in the bargaining power of employers. In consolidated health care markets characterized by one or a few health care systems, employers may have monopoly power in the market for their services and the ability to raise prices. They may also have monopsony power in the labor market and the ability to pay lower wages. The increase in hospital mergers over the 2005–2015 decade may partly explain stagnant or falling real wages in non-professional health care occupations.

Policies that increase competition in health care markets are good for consumers; providers will have to lower prices and increase the quality of care to compete for patients. They are also good for workers; in labor markets in which health care workers have a greater choice of employers, health care organizations will have to pay higher wages to attract and keep workers.

Policies that make it easier for workers to join unions can increase the bargaining power of workers. In the absence of increases in unionization rates, public policy can set a floor under workers’ pay and living standards. Reforms such as a $15-dollar-per-hour minimum wage, universal access to health care, free higher education, and affordable quality child care will provide health care workers with greater economic security.

This column originally appeared on Spotlight on Poverty and Opportunity.

More articles by:
bernie-the-sandernistas-cover-344x550
April 02, 2020
Pam Martens - Russ Martens
The Dark Secrets in the Fed’s Last Wall Street Bailout Are Getting a Devious Makeover in Today’s Bailout
Jason Hirthler
The Temple of Self-Gratification
Eve Ottenberg
Prisons are a COVID-19 Petri Dish
P. Sainath
What We Should Do About COVID-19
Rev. William Alberts
The Coronavirus Rained on Trump’s Easter Charade
Stephen Corry
It’s Time to Clean Ecofascism Out of Environmentalism
Binoy Kampmark
The Swedish Alternative: Coronavirus as a Grand Gamble
Rebecca Gordon
The Future May Be Female, But the Pandemic is Patriarchal
Thomas Knapp
By The Time We Notice We’re Hungry, It May Be Too Late
David Rovics
An Open Letter to My Landlord #CancelRent
Simone Chun
Appeal for Humanitarian Diplomacy in the Korean Peninsula
Liu Jian
How COVID-19 Changed Our Lives: a Report From Beijing
Dean Baker
The Return of Infrastructure Week
Mike Garrity
Alliance for the Wild Rockies Sues Feds to Stop a Project That Will Kill 72 Yellowstone Grizzly Bears in Wyoming’s Upper Green and Gros Ventre Rivers
Elliot Sperber
Plague Days
April 01, 2020
Steve Early - Suzanne Gordon
No Pandemic-Related Pause? VA Privatization Leaves Veterans Waist Deep in Another Big Muddy 
Kenneth Surin
The UK and Covid-19 Crisis
Jack Wareham - Dylan Burgoon
“Whose University? Our University!” The Struggle for a COLA at UC Berkeley
Erik Molvar
Oil industry Exploits Pandemic as Excuse to Dodge Federal Regulations, Fees
Robert Jensen
Apocalypse, Now and Forever
Jake Johnston – Kira Paulemon
COVID-19 in Haiti: the Current Response and Challenges
Jen Moore
Guatemalan Water Protectors Persist, Despite Mining Company Threats
Danny Shaw
“The Coronavirus is Man-Made:” the Conspiracy Theory Trap 
Nafeez Ahmed
Former WHO Director: 8-Week Suppression Strategy Could Stop US COVID Crisis in Its Tracks
Frances Madeson
Death Camps in the Making: New York’s Prisons During a Time of Pandemic
Clark T. Scott
The White House and the CDC are United in Stupidity
George Ochenski
What Does COVID-19 Have to Do With Industrial Pollution?
Norman Solomon
Trump’s Mass Negligent Homicide Doesn’t Let Democratic Leaders Off the Hook
Scott Owen
Another New Peace
Elizabeth Schmidt
Lessons From Africa: Military Intervention Fails to Counter Terrorism
Greta Anderson
What’s the Hang Up on Releasing Adult Lobos?
Ted Rall
The Speech Trump Must But Cannot Give
Marshall Sahlins
Trumpty’s Country
March 31, 2020
Jonathan Cook
Netanyahu Uses Coronavirus to Lure Rival Gantz into ‘Emergency’ Government
Vijay Prashad, Du Xiaojun – Weiyan Zhu
Growing Xenophobia Against China in the Midst of CoronaShock
Patrick Cockburn
Trump’s Chernobyl Moment: the US May Lose Its Status as World Superpower and Not Recover
Roger Harris
Beyond Chutzpah: US Charges Venezuela With Nacro-Terrorism
M. K. Bhadrakumar
Has America Reached Its Endgame in Afghanistan?
Thomas Klikauer
COVID-19 in Germany: Explaining a Low Death Rate
Dave Lindorff
We’ve Met the Enemy and It’s a Tiny Virus
Binoy Kampmark
Barbaric Decisions: Coronavirus, Refusing Bail and Julian Assange
Nicolas J S Davies
Why is the U.S. so Exceptionally Vulnerable to Covid-19?
James Bovard
The Deep State’s Demolition of Democracy
Michael Doliner
Face Off: the Problem With Social Distancing
John Feffer
The Politics of COVID-19
FacebookTwitterRedditEmail