Democracy in America | Health-care jobs

Why nurses are the new auto workers

Health workers promise to be at the centre of a new bitter labour conflict

By C.H. | NEW YORK

CAR manufacturing was the defining industry of the 20th century. In the 21st it is health care. Health spending comprised 17% of America’s GDP in 2012. About one in ten workers are employed in the health sector. These workers have the crucial job of making American health care more efficient, probably the country’s top domestic challenge. Those who are not doctors have a particularly important role—nurses and lesser-trained workers can monitor and care for patients out of hospital, which should result in better quality of life for patients and lower costs for everyone else. But just as the car industry was the 20th century’s main battleground for fights over labour, it is increasingly clear that health workers will be at the centre of the latest bitter conflict.

In the darkest days of the recession, health employment was a rare bright spot. But even then, all was not rosy. Take a new report on health workers from the Brookings Institution, a think-tank. Those without college degrees comprised 61% of the health workforce from 2009 to 2011. Of these, 85% had one of ten jobs, such as home-health aides, registered nurses and medical assistants. These health workers have generally fared better than their peers in other sectors—in the 100 biggest metropolitan areas in America, the number of health-care jobs for people without college degrees jumped by 46% from 2000 to 2011, compared with just 3% job growth for workers without college degrees across all industries. Nevertheless, most health jobs saw median earnings decline over that period. And the fastest growing occupations were those with low wages. Personal-care aides, who earn just $21,000, nearly tripled in number.

Now health workers face new headwinds. Slowing health spending (in part due to the recession and probably also due to new efficiency) is good news for the broader economy and bad news for them. Health-care employment grew by just 1.8% in the year to June.

Going forward, pressure on wages will likely intensify, for two reasons. First, more care is moving from hospitals to clinics and from clinics to homes. That is sensible. As a patient ages, his chronic condition is better managed continuously at home, instead of letting his disease degenerate until a costly trip to the emergency room. But jobs at clinics pay less than similar ones in hospitals. Home-health workers are among the lowest paid of all.

Second, hospitals themselves are looking for new ways to save. The federal government is clamping down on hospital payments. Experimental contracts, from both public health programmes and private insurers, reward hospitals for lowering spending. Given that labour usually accounts for at least half of a hospital’s costs, workers are a natural target. For example, MedAssets, a health-care consultancy, has long helped hospitals squeeze waste out of their supply chains; now the firm also helps boost labour productivity. That includes maximising a worker's time and skills—both surely worthy endeavours. Inevitably, however, hospitals are also looking to restrain hiring, wages and benefits. Some rely on outsourced labour, hiring nurses and other workers from independent agencies on a temporary basis. Others have sacked workers. Last year health care accounted for more layoffs than any industry but finance.

All this sets the stage for fights between workers and hospital management. America’s biggest local health-care union, 1199SEIU, represents nurses, aides, hospital janitors and other health workers along the east coast. On July 21st the union announced a tentative deal with big hospital systems in New York—demands included better health insurance and a clear process for unionising workers in clinics. But the deal has yet to be finalised. Further fights are likely. “This is all happening in the context in the decimation of the middle class in America,” says the 1199’s Dave Bates. On July 20th a nurses’ union in New Mexico rejected a proposed contract. And in California, a nurses’ union is preparing to fight Kaiser Permanente over the terms of its next contract. Talks began today. They will be rancorous.

Dig deeper: Public and private austerity takes its toll on health-care workers (June 2014)

(Photo credit: TIM SLOAN / AFP)

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