Report: Health Care is Michigan’s Largest Private-sector Employer, Loss of 11K Jobs

The health care industry directly employed nearly 572,000 Michigan residents in 2020, according to a new report issued by the Partnership for Michigan’s Health, a consortium of Lansing-based medical organizations.
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The health care industry directly employed nearly 572,000 Michigan residents in 2020. // Stock Photo
The health care industry directly employed nearly 572,000 Michigan residents in 2020. // Stock Photo

The health care industry directly employed nearly 572,000 Michigan residents in 2020, according to a new report issued by the Partnership for Michigan’s Health, a consortium of Lansing-based medical organizations.

The partnership’s report states health care continues to be the largest private-sector employer in the state despite staffing losses attributed to the COVID-19 pandemic.

The 2022 Economic Impact of Healthcare in Michigan report shows direct health care workers in Michigan earned $44.2 billion in 2020 in wages, salaries, and benefits. Hospitals alone employed 224,000 individuals in the state in 2020.

Direct health care employment helps create additional jobs that are indirectly related to or induced by health care, the report concludes. These indirect, health care-supported jobs are held by more than 502,000 people who earned about $28 billion in 2020 in wages, salaries, and benefits. Together with their employers, the nearly 1.1 million workers in the health care sector contributed almost $15.2 billion that year in local, state, and federal taxes. These taxes include Social Security, income, motor vehicle, sales, property, corporate, and more.

“This report demonstrates the unquestionable and significant role health care, and specifically hospitals, play in Michigan communities,” says Brian Peters, CEO of the Michigan Health and Hospital Association. “Not only have they played a vital role in the care and treatment of patients, but they remain far and away the leading employers and large drivers of economic activity.”

Data from 2020 shows the early impact the pandemic had on the economic strength of the health care sector in Michigan. In particular, it illustrates the rise in labor costs as many nurses transitioned to contract labor with staffing agencies.

Compensation for direct jobs in nursing and residential care rose by about $200 million from 2019 to 2020, although the number of jobs fell by about 11,000. Specific to hospitals, the number of jobs fell by about 7,000 jobs from 2019 to 2020, but total compensation remained about the same.

The loss in jobs represents the initial exit of many health care workers due to burnout and stress associated with the pandemic. Both nationally and in Michigan, health care experienced a shortage of employees for several years and the pandemic caused a sudden loss of existing workers.

With Medicare beneficiaries in Michigan increasing by more than 8 percent over the past five years to a total of 2.1 million people, Michigan needs more health care workers to serve the changing needs of the state’s aging population, according to the report.

“Health care careers are not only extremely rewarding, but crucial to our society,” says Kris Nicholoff, executive director of the Michigan Osteopathic Association. “While health care careers remain in high demand, the data shows there are over a million individuals we owe our gratitude toward for providing care during one of the most trying and tumultuous years in modern history.”

Julie L. Novak, CEO of the Michigan State Medical Society, says: “Physicians are and will continue to remain a key driver of health care employment and economic growth. Investing in physician-led team-based care and health care careers is key to the economic vitality and health of our state, local communities, and residents. Physician practices, hospitals and other care settings offer good paying and stable jobs in careers that truly improve and save lives.”

To view the full report, visit here.

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