The Growth of Healthcare Employment in the United States

In January, the U.S. economy added approximately 130,000 new jobs, with nearly all of these positions in the healthcare sector. This trend reflects a long-standing pattern of growth in healthcare employment, driven by an aging population, advancements in medical treatments, and the labor-intensive nature of healthcare services.

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Over the past year, the health and social assistance sector has gained about 760,000 jobs, while other sectors have collectively lost around 400,000 jobs. Medical care now constitutes 12 percent of non-farm jobs, a significant increase from just 2 percent in 1960. This growth is closely linked to the expansion of insurance and entitlement programs, as well as continuous improvements in medical capabilities, which increase public demand for healthcare services.

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Healthcare jobs are notably lucrative, averaging 55 percent higher pay than the average occupation. With 90 percent of funding for these jobs coming from insurance or entitlement programs, they are less susceptible to economic downturns. The healthcare sector's share of the U.S. GDP has surged from approximately 3 percent to 18 percent between 1900 and 2023, contrasting sharply with the decline in agriculture's GDP share from 15.5 percent to under 1 percent during the same period.

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While healthcare jobs provide essential services and support millions of households, they also impose significant costs on consumers, taxpayers, and the economy. The labor-intensive nature of healthcare accounts for 84 percent of medical practice expenses and 56 percent of hospital costs. Critics argue that these rising costs can make medical care less accessible and increase the financial burden on other sectors, potentially stifling job growth elsewhere.

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Political pressures to maintain employment in the healthcare sector are expected to keep job growth buoyant, despite potential technological advancements that may alter the landscape. Long-term care, which requires a personal touch, is particularly poised for continued job creation, driven by the increasing number of seniors without nearby family support. Medicaid home-based support services spending rose from $97 billion in 2019 to $146 billion in 2023, highlighting the growing demand for care.

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As the population ages and the demand for healthcare services continues to rise, the healthcare sector is likely to remain a critical component of job growth in the U.S. However, the sustainability of this growth will depend on balancing the costs associated with healthcare employment against the value provided to patients and the broader economy.

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• “Health care cannot be the economy’s sole engine of job growth.” — City Journal

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• “To the extent that health-care costs are unduly inflated by public policy, it means that households and the government have less money to purchase other goods and services.” — City Journal

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• “Long-term care, which inherently requires a personal touch, is particularly likely to continue generating additional jobs.” — City Journal

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• “Health-care jobs can provide a solid income, source of purpose, and community engagement for millions of Americans.” — City Journal

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