Workers Were Older and More Highly Educated in 2015 than in 2005; Wages Were Stagnant or Fell
This is the third in a series of posts based on the CEPR report, Organizational Restructuring in U.S. Healthcare Systems: Implications for Jobs, Wages, and Inequality, that examines the experiences of healthcare workers over a decade of change from 2005 to 2015.
Jobs in the two largest nonprofessional occupation groups ― medical technicians and health aides and assistants ― grew 17.2 percent and 20.0 percent respectively, and in 2015 the number of workers in these jobs reached 5.5 million. Yet median real wages of medical technicians working full-time, full-year 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. Median real wages of health aides and assistants employed full-time, full-year fell from $14.87 to $14.72 in hospitals and were flat in outpatient facilities, rising by a penny from $14.27 to $14.28 between 2005 and 2015.
The most widely cited explanation for low and stagnant wages is that workers with these earnings must be poorly educated. The assumption, especially for workers earning less than $15 an hour, is that most of them have a high school degree or less. Workers are led to believe that post-secondary education is the key to a pay raise. For healthcare workers in these occupations, however, wages stagnated or fell despite a decline in the share of the least educated workers and an increase in the share of those with a college degree or more.
The modal education level for med techs in hospitals and in outpatient care facilities was some post-high school/some college ― already 58 percent in hospitals in 2005; 65 percent that year in outpatient care. Over the decade, the share with a high school degree or less fell from 18.5 to 14.3 percent in hospitals and from 18.7 to 17.4 percent in outpatient care centers. At the same time, the share of workers with a bachelor’s degree or more increased from 23.8 to 26.6 percent in hospitals, and from 16.2 to 18.3 percent in outpatient care.
The change in education attainment was more dramatic for health aides and assistants. 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, the share with a high school degree or less had fallen to 29.4 percent in hospitals and 22.9 in outpatient care. The share with some post-secondary/some college education rose from 48.4 to 56.5 percent in hospitals and from 55.2 to 59.4 percent in outpatient facilities, while the share with four years of college or more rose from 10.3 to 14.1 percent in hospitals, and from 12.3 to 17.7 percent in outpatient care. These are dramatic increases in educational attainment. While the share of health aides and assistants in hospitals with a college degree or more is just over half the share of medical assistants with this educational level, the shares of workers with this level of education were nearly the same for both occupational groups. Despite these notable improvements in education attainment, median real wages of these workers fell in hospitals and were flat in outpatient care. Median pay of these workers was still less than $15 an hour in 2015.
More recently, some researchers have attributed stagnant or declining real wages for workers in general to the baby boomers aging out of employment and into retirement. The argument is that higher-paid older workers are leaving the workforce and are being replaced by lower-paid younger workers, thus reducing the median real wage even if the wages of workers who continue in employment over the period have increased. However, this explanation does not hold in healthcare. There was no decline in the share of workers 55 years of age or older in hospitals and outpatient facilities. Indeed, the share of workers in this age category has actually increased. It rose from 17.2 to 24.1 percent in hospitals (a 40 percent increase) and from 16.9 to 21.7 percent in outpatient facilities (a 28 percent increase) between 2005 and 2015. The share of workers under 35 rose 5 percent in hospitals and 8.5 percent in outpatient care centers.