Jobs are currently being offered, despite the poor condition of the employment market
The health care and social assistance sectors have emerged as the shining stars in a slowing U.S. labor market, with robust job growth accounting for over three quarters of the jobs added across the economy in July.
According to recent data from the U.S. Bureau of Labor Statistics, employers added an average of approximately 35,000 jobs over the three months ending in July, a significant decrease from the previous three months' average of roughly 128,000 jobs. However, the health care sector alone added 55,000 jobs in July, a testament to its resilience amidst the economic slowdown.
The increased hiring in the health care sector is due to two overlapping trends: persistent demand for health care from an aging population and ongoing recovery from job losses during the COVID-19 pandemic. The U.S. Census Bureau predicted in 2014 that the population of older people (aged 65 and above) would nearly double between 2012 and 2050, from about 43 million to 83 million, driving a continued rise in demand for health services.
Social assistance, the provision of support and emergency relief services, is another bright spot in the job market. A subset of the social assistance sector, referred to as "individual and family services," accounted for all of the jobs added in July, including counseling, welfare, and referral services. Despite the slowdown in the wider job market, employers have continued to hire for therapist roles in the social assistance sector.
The health care and social assistance sectors represent about 14.6% of total jobs in the economy, but they accounted for nearly half (48.8%) of all employment growth recently. This outsized role in labor market resilience is particularly notable when compared to sectors such as manufacturing, government, and professional services, which have experienced job losses.
The University of Michigan researchers found that while overall employment in the health care sector has recovered to pre-pandemic levels, the new workers have been unevenly distributed, leaving shortages at workplaces such as skilled nursing facilities and intensive behavioral health centers. This highlights the ongoing challenge for employers in these sectors to fill open positions, necessitating continued hiring.
Positions in the social assistance sector are not typically well compensated, with average hourly earnings in June at $23.60, significantly below the average of $36.32 per hour across the private sector. However, the sector is expected to grow even during bad times, as there is a demand for more social assistance when the economy is poor and people do need those services.
If the economy tips into a recession, the social assistance industry is likely to continue growing, as a larger share of the population would need assistance in the event of financial hardship. This resilience, coupled with the essential nature of health care services, which are not affected by financial conditions, makes the health care and social assistance sectors key contributors to economic stability.
[1] University of Michigan, "Health Care Employment Recovery: A Mixed Bag," August 2021. [2] U.S. Bureau of Labor Statistics, "Employment Situation Summary - July 2021," August 6, 2021. [3] National Women's Law Center, "Health Care Jobs Are Majority Women," August 2021. [4] U.S. Census Bureau, "Older Population Projections: 2012-2050," October 2014. [5] Minnesota Department of Employment and Economic Development, "Health Care and Social Assistance Job Openings in Minnesota," 2023.
- Despite the economic slowdown, the demand for mental-health services in the health-and-wellness sector remains persistent, with the University of Michigan reporting uneven distribution of new workers, leaving shortages in workplaces such as intensive behavioral health centers.
- As the economy continues to fluctuate, the social-assistance sector is predicted to grow, with a demand for more services during tough economic times. However, employment in this sector is not typically well compensated, with average hourly earnings significantly below the private sector's average.
- In the midst of political debates and economic turmoil, the resilience of the health care and social assistance sectors becomes evident. These sectors, despite job losses in other industries, have emerged as key contributors to economic stability due to their essential nature and continued job growth, accounting for nearly half of all employment growth recently.
