Three Takeaways on the Triad’s Health Care Industry

The Piedmont Alliance for Triad Healthcare (PATH), a group of health care workforce leaders in North Carolina’s Triad region, recently asked LEAD to present on the state of the health care industry in the region. Health care is an essential industry in the Triad and North Carolina economies, and, in many ways, recent economic experiences in the Triad’s health care industry reflect statewide trends. Here are three interesting takeaways from the analysis and presentation:

1.    Health care is an employment driver in the Triad

The Triad’s health care industry plays a vital role in the region’s economy. The broad industrial sector encompassing health care businesses, Health Care and Social Assistance, employs more people in the Triad than any other industry (see Figure 1). North Carolina’s Health Care and Social Assistance industry similarly employs more people than any other industry, and, in both the Triad and state, employment at hospitals drives total industry employment.

2.    The Health Care and Social Assistance industry offers below average wages

While Health Care and Social Assistance leads other Triad industries in employment, it lags in average weekly wages. The industry’s $1,037 average weekly wage in Q4 2021 ranks 13th out of 20 2-digit NAICS industries in the Triad, slightly below the region’s average (see Figure 2). Statewide data shows a similar trend. Average annual wages in North Carolina’s Health Care and Social Assistance sector were $1,277 in Q4 2021, ranking 11th among all industries in the state.

Health care’s low wages relative to other industries reflects the wide range of occupations in the industry.  Health care establishments employ everyone from Cardiologists, with statewide average annual wages of $369,680 in 2021, to Home Health and Personal Care Aides, with average annual wages around $24,000. These lower paid occupations make up a larger share of total employment than higher paid jobs in the industry. Occupations with average annual wages above $100,000 were 8.7 percent of the state’s total Health Care and Social Assistance employment in 2021, while jobs with annual wages below $30,000 made up 26.8 percent of employment. Thus, the Health Care and Social Assistance industry’s wages tend to rank lower among other sectors. 

3.    Health care labor markets are tighter than other industries, complicating hiring challenges

A relatively large share of lower paid occupations and a tight health care labor market help explain some of the hiring difficulties health care employers face. According to LEAD’s Labor Supply and Demand dashboard, labor markets in all industries are tight across the state and Piedmont-Triad Prosperity Zone.¹ In July 2022, jobseekers per job opening in North Carolina, a common measure for labor market tightness, sat at 0.9, while the same ratio in the Triad was slightly lower at 0.8. For jobs in the Health Sciences career cluster, job market conditions are even better for workers. Between 2018 and 2020, the jobseekers per job opening ratio in the Triad’s Health Sciences career cluster averaged 0.6, meaning there were, on average, nearly 2 jobs available for every health care worker looking for a job during this period (see Figure 3).

Tight labor markets often transfer more power to workers in employment negotiations. Conventional wisdom suggests this enables employees to secure pay gains from businesses trying to attract workers. Nominal wages have certainly risen in recent years—especially in the lowest paying sectors—and, until the most recent inflationary bout, wage growth largely outpaced aggregate price increases. This dynamic gives workers more options as they might be able to leave their current job for a better paying one, or switch to a similar wage job with working conditions that are a better fit. Therefore, tighter labor markets in the Triad and North Carolina’s health care industries likely make hiring difficulties even more acute than in other industries for positions at the lower end of the pay scale. 

Health care is a critically important industry for many reasons, not the least for employment. Like most industries in the current economic environment, health care employers are dealing with the effects of a tight labor market, namely difficulties finding, hiring, and retaining workers who have plenty of employment options right now. The state and region’s health care challenges are not unique, as many communities face similar struggles. Some health care training and education programs are expanding apprenticeships that support students educational goals while allowing them to earn a stable income. Strategies such as this and others could prove effective in combatting the labor market challenges facing the industry.

¹The Piedmont-Triad Prosperity Zone includes Alamance, Caswell, Rockingham, Guilford, Randolph, Davidson, Davie, Forsyth, Stokes, Yadkin, and Surry counties.