Healthcare employment held remarkably steady during the Great Recession of 2008 and 2009. Not so with the COVID-19 pandemic.
The healthcare industry lost 1.4 million jobs in April, preliminary data from the Bureau of Labor Statistics show. The numbers lay bare COVID-19's economic damage, as businesses shuttered amid stay-at-home orders implemented in mid- to late-March.
The healthcare economy tends to be largely immune to reductions in consumer demand from income drops, said Neale Mahoney, a health economist at the University of Chicago Booth School of Business.
"Here, I don't think the drop is driven by the fact that people have less money in their wallets," he said. "Yes, they have less money in their wallets, but the drop is driven by the fact that you can't go to a dentist in Chicago except for emergency procedures. It's really driven by the fear of COVID, not the income shock."
The U.S. unemployment rate spiked to 14.7% in April, the highest rate since the Great Depression. Total nonfarm employment fell by 20.5 million jobs in April, much steeper than the 701,000 estimated job losses reported in March. Last month also saw the biggest unemployment rate spike since at least January 1948, when the BLS started tracking unemployment numbers. April's unemployment rate exceeded the Great Recession's unemployment peak of 10%.
One point that should provide some relief: 18.1 million of April's unemployed workers—about 78%—reported being on temporary layoff, which the BLS said includes people who are furloughed. That holds open the likelihood that many will return to work once businesses reopen in their states.
Countless hospitals, clinics and other providers have reported furloughing workers while they hold off on elective procedures in lieu of permanent layoffs. For-profit Tenet Healthcare, for example, announced it had furloughed 500 full-time equivalent positions in early April, none involved in patient care.
Healthcare's 1.4 million jobs lost in April follows an estimated 42,500 jobs lost in March. The ambulatory sector comprised 82% of April's job losses.