According to a recent report by BloombergBusiness, jobs in the US healthcare sector are more plentiful than ever before. Indeed, according to statistics for April 2015, job openings in the healthcare industry reached a new record high that surpassed anything seen before in over 14 years of data collection. However, the hiring rate for those record numbers of openings remained almost constant. For those already employed in the sector, that means good news for new opportunities and increased pay.
As the US economy has recovered from the recession following the collapse of the housing market in 2008, a notable disconnect has puzzled many economists. This disconnect was the link between employment rates and income. Traditionally, as unemployment rates drop, median income rates climb. However, during this recovery period that has not been the case. Many have speculated as to the cause, but some believe it resulted from "underemployed" workers desperate to take any work despite a pay cut.
The April Healthcare openings may lead to a correction in that trend. It indicates growth in excess of supply, meaning additional qualified applicants should be able to trade up to higher paying jobs. That, in turn, should drive up median salaries.
Putting those numbers into perspective, the healthcare industry had 910,000 job listings in April, but only about 513,000 who made it onto payrolls. That means a ratio of about 1.8 job openings to every person who was ultimately hired in the healthcare sector. However, this trend extends beyond healthcare. In fact, looking at private employers in all sectors, the ratio of jobs available to those hired was about 1.05 to 1.
This expansion of opportunities but lack of available hires should empower employees to demand higher salaries more commensurate with their relative levels of experience. In the healthcare sector, wages grew by 2.2 percent before April, and jumped up to 2.3 percent after. While the ratio of openings to hires may be less impressive in other sectors of the economy, the economy as a whole saw salary expansion of 2.2 percent prior to May, and a jump to 2.3 percent after according to the US Labor Department.
Most analysts predict that the number of openings versus number of hires should continue to diverge for the rest of the year and into 2016 as the economy continues its slow, post-recession recovery. Should that prediction hold true, salaries should continue to expand, helping to drive further domestic spending, fueling further economic recovery and growth.