Perspective: As 2020 Ended, Health Jobs Were Down 3 Percent but Recovering Faster than Overall Economy

While the economy lost 140,000 jobs in December, health care added 39,000 jobs, comparable to the 31,000 added in November. Since the unprecedented jobs losses of March and April 2020, health care employment has been recovering faster than overall employment, regaining about two-thirds (68%) of the jobs lost, while the economy overall has regained a bit over half (56%) of jobs lost. Nevertheless, health care employment has still not reached pre-pandemic levels and remains down by about 3%, or 500,000 jobs, below the February 2020 peak.

According to the preliminary data for December 2020, ambulatory care settings added a modest 21,000 jobs and hospitals added a strong 32,000 jobs in December, while nursing and residential care settings continued the 2020 pattern of decline in employment, losing 13,000 jobs. Employment in ambulatory care settings stands 2.2% below the peak, representing 173,000 fewer jobs than in February. Hospital employment is down 1.3%, or 70,000 jobs. Nursing and residential care facilities are not regaining jobs and have lost 264,000 jobs since February, a 7.8% drop in employment.

We have emphasized in many of our writings how unusual it is for the health sector to lose jobs and revenue even during economic downturns, and that health care has not provided the backstop to job loss that it has in past recessions. However, health care has still performed better than the overall economy. There are 9.8 million fewer jobs in the economy at the end of 2020 compared to the peak in February 2020, a decline of 6.5%. If we take out the health sector, total non-health jobs are down 6.9% (Figure 1). In a pattern that is familiar from past recessions, the better performance of health sector means that the health share of total U.S. employment has grown again, from 10.8% at the beginning of 2020 to 11.2% at the end of the year. Health care now officially employs more than one in nine working Americans.

Figure 1: Cumulative Health Care and Non-Health Care Job Growth Since February 2020

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