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Hospitals are still top employers, but service jobs wages lacking, study says

While hospital service employment benefits local economies, many of the workers in those positions earn money that falls short of a living wage.

Jeff Lagasse, Associate Editor

The hospital industry serves as a key example of what can happen by improving labor standards in the service sector, according to a study published recently by the National Employment Law Project, but it also has a way to go. Because, while hospital service employment benefits local economies, many of the workers in those positions earn money that falls short of a decent living wage.

The group's findings provide both good news and bad news for hospitals. The good news is that they're often the economic anchors for their communities, directly or indirectly generating millions of jobs -- particularly in the industrial Midwest, which was the focus of the study.

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Overall, healthcare has seen sharp increases in employment over the past 25 years, adding about 6.8 million jobs, a nearly 80 percent increase over that period. That eclipses all other private-sector industries, and ranks it second only to professional and business services; and healthcare is expected to overtake that sector as well by 2024.

As it's currently the fastest-growing sector in terms of employment, healthcare is expected to add the most new jobs nationwide over the next seven years, with projected growth of about 21 percent, providing 41 percent of total employment growth over the same period. Manufacturing employment, by contrast, is expected to fall by 7 percent.

[Also: Healthcare sector continues steady march of job growth in August with 16,000 jobs added]

In all of the industrial Midwest states except Kentucky, the healthcare sector is expected to add more than 650,000 jobs by 2024, including 120,000 in hospitals. That's a 13 percent increase from 2014.

that's the good news. The bad news is that 70 percent of service workers in hospitals earn less than $15 an hour. These are workers who tend to patients, transfer patients, stock supplies and equipment, cook and prepare food, process specimens, complete and manage drug orders and sterilize surgical instruments, among other tasks.

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What that means for hospitals, according to the study, is that they're effectively missing an opportunity to incubate good jobs in their communities, which would lay the foundation for long-term economic growth and stability. The authors clam this is an area where hospitals could do more. They are, after all, the single largest component of the healthcare sector and the second-largest source of private sector jobs overall, employing more than 5.4 million people.

The study's prescription is to increase wages and provide a stronger "worker voice." Worker voice can directly translate into better patient care, the authors said. To illustrate this, a team of economists recently completed an empirical analysis of hospital unionization in California between 1996 and 2005. They found that hospitals in which key caregivers were unionized outperformed non-unionized hospitals in 12 of 13 "nurse-sensitive" patient outcomes, after accounting for hospital-specific trends.

The authors found that after nurses were unionized, hospitals had significant drops in the incidence of everything from diabetes-related sugar shock to delusion, disorientation and depression. They suggested that higher wages may result in increased effort, reduced turnover and better morale, and said similar benefits could emerge from unionizing hospital service workers as well.

Twitter: @JELagasse
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