The Labor Market and Long-Term Health Care: A Perspective on Nursing Aides; Will the "Invisible Hand" Provide for Direct-Care Needs?

By Friedman, Susan K. | Business Economics, July 2005 | Go to article overview

The Labor Market and Long-Term Health Care: A Perspective on Nursing Aides; Will the "Invisible Hand" Provide for Direct-Care Needs?


Friedman, Susan K., Business Economics


The aging of the baby boom generation underlies anticipated rapid growth in jobs for nurses and support personnel for longer-term care. Research on help-wanted advertising shows strong recruiting activity for nurses. However, for nursing aides and related positions, there is substantially less intensity, although there are regional differences. This overall finding conflicts with demand-based expectations and may imply a market that will not adequately fulfill projected needs.

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The increase in outsourcing by U.S. companies abroad, particularly the new outflow of non-manufacturing activities (telephone reservations, computer support), raises concerns about the future availability of work for Americans. As technology advances, more and more communication-oriented jobs can be transported to lower-cost labor markets, particularly to countries where there is proficiency in English. In this environment, one would expect that jobs involving direct personal contact, such as health care workers, would be the most secure haven for workers. (1) This environment also implies that the labor market for health care workers will have to be cleared by domestic factors, with only immigration as an offshore safety valve.

As evident in a recent NABE Policy Survey (National Association for Business Economics, 2005), the burgeoning older population and costs of health care are seen as major longer-term issues for the economy. For analysts in the health care industry and government, the prospect of growing needs, financial constraints, and a diminished pool of the traditional caregiver population relative to senior citizens represents a daunting combination. An important, and somewhat neglected, component of the health-care labor force is that of nursing aides and related positions. This paper explores important aspects of the long-run demand and supply of such workers.

Employment Projections

Recent forecasts from the U.S. Department of Labor's Bureau of Labor Statistics (BLS) identify the occupations that are expected to show the greatest absolute increase in jobs between 2002 and 2012. The top ten are presented in Table 1. (2) Traditionally, the jobs shown in Table 1 have required an on-site presence. Among these fields, retailing and customer service are already showing the impacts of technology and outsourcing. In addition, "distance learning" is evident in teaching, and self-service checkouts are available in cashiering. However, the nature of the work in most of these areas is still heavily dependent on face-to-face contact with customers, and this is particularly true in health services.

The actual need to fill jobs is considerably larger than the absolute increase in positions, due to factors such as employee retirement or movement to another field (Hecker, 2004, p.104). In Figure 1, the BLS statistics show about 1,396 thousand job openings in nursing between 2002 and 2012, taking account of growth as well as replacing workers who are leaving the workforce. About 1,101 thousand of these are for registered nurses, of which 623 thousand would be new jobs; and 295 thousand job openings are for licensed practical and licensed vocational nurses--142 thousand new positions (Hecker, 2004, p. 87).

In the support area, 523 thousand job openings for nursing aides, orderlies, and attendants are expected, of which 343 thousand would be new positions. For the broader category of nursing, psychiatric, and home health aides, 894 thousand job openings are slated over the period, of which 630 thousand would be new positions--slightly exceeding new positions for nurses. For perspective, note that physicians and surgeons are predicted to show job openings of 191 thousand (114 thousand new positions) over this time frame.

The aging of the baby boom generation is the major factor underlying the increasing need for health care workers. In 1990, according to the U.S. Census Bureau, the population of individuals 65 years and older was approximately 30 million; in 2010, this will be around 40 million, and in 2020, about 54 million. …

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