Waiting to fly on Tuesday, I was lucky enough to find myself in front of a CNN Airport Network TV when this story about the nursing shortage crisis was aired.
Primary care shortages, lab tech shortages, nurse shortages. News stories can be found daily with updates on health care worker crises. One begins to wonder if anyone takes notice any more.
Well they should. And not just for the consequences of an insufficient number of workers to care for patients—but for what solving the problem is going to do to our economy.
Many regions that have lost manufacturing jobs have rebuilt their economies around education and health-care. In former manufacturing hubs like Detroit, Cleveland, St. Louis, and Pittsburgh, the largest employers are colleges, universities, and hospitals. This is seemingly good news—it means, at least, that residents of these cities can find work. But according to my team’s analysis, high concentrations of these sectors ultimately do not bode well for cities’ economies. Although they may employ many people and provide great services, education and health-care add relatively little to regional income. That is even truer when we look at education and health-care jobs as a share of a region’s creative economy. As the share of education and health-care jobs rises, regional earnings falls. The more creative class members take jobs in education and health-care, the lower their region’s wages tend to be.
Why might this be? For one, education and health-care sectors tend to monopolize a region’s workforce—because the demand for employees is so great, it leaves other sectors with smaller hiring pools. Education and health care–like police and fire departments–are basic necessities. Every region must devote some of its workforce to them. They also bring in relatively little money from outside the region. Aside from out-of-state tuitions and government research grants, most of their income comes from within the region. Contrast that with an innovative and creative company, or cluster of companies, that brings in money from clients worldwide. Growing regions tend to have relatively higher concentrations of other key occupational groups—and it’s those other jobs that are concentrating geographically.