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July 1, 2013

Health care fuels Kansas City area job growth

The national health care industry kept growing throughout the recession and otherwise slow recovery, and that’s been important in Kansas City.

Without the health care industry, the Kansas City area’s economy would have suffered far more in the Great Recession and slow recovery.

A new Brookings Institution study of the largest metropolitan areas found that the Kansas City region has more than the national average share of health care practitioners and health technologists in its labor force, and the health care industry has grown faster here than the national average.

While health care jobs nationally contributed to 13 percent of job growth in the recovery, those jobs represented 18 percent of the post-recession growth in the Kansas City area, according to the report released Monday.

“Health care created about 6,300 jobs – out of about 35,000 created in the Kansas City area since the recovery began – and that can be a good news/bad news thing,” said Martha Ross, a fellow in the Brookings Metropolitan Policy Program.

“It’s good to have job growth in that industry, but you want broad employment growth, so it’s important for the metro area’s overall health to have growth in other industries as well,” she said in a telephone intervew.

There’s another mixed blessing about job growth in health care: The average earnings of health care practitioners, a category that includes physicians, nurses and dentists, are nearly double average worker wages. That’s good for the local economy.

But the average wages of home health care aides and other kinds of nursing assistants are lower than national pay averages. And their limited discretionary income means less purchasing power and a small economic ripple in the economy.

More than 85,000 workers out of the Kansas City area’s employment base of about 970,000 are health care practitioners, technicians, such as lab workers, and health aides, Brookings reported, based on U.S. Department of Labor industry classifications.

Nationally and in the Kansas City area, about 1 in 10 jobs are in the health care industry. From 2003 to 2013, employment in that industry grew 22.7 percent, far outstripping the 2.1 percent job growth in all other industries.

Brookings said that in the 100 largest U.S. metro areas, the share of health care practitioners – which includes doctors, nurses and dentists – averages 3.6 percent of all employment. In the Kansas City area, those jobs account for 3.8 percent of employment.

The national average share for health care technologists – which includes lab technicians, sonographers and paramedics – is 2.1 percent, compared to 2.2 of the workforce in the Kansas City area.

On the other hand, the metro area falls short of the national average in the share of workers who are nursing assistants and home health aides – a 2.6 percent share in the Kansas City area, compared to 2.9 percent nationally.

“This is a limited view of the health care industry,” Ross, the report’s co-author acknowledged. “A lot of times, the definition of an industry is awfully narrow, so you have to mix and match among industry codes to get an accurate picutre of what you’re seeing on the ground.”

In other words, the fast-growing Cerner Corp., which employs about 8,460 in the Kansas City area, is not counted in the Brookings’ numbers because its industry category is information technology, not health care, even though its IT work is integral to the health care industry.

Overall, “the health care industry has grown steadily for at least the past decade and has never expienced a quarter-over-quarter decline” from 2003 to the first quarter this year, the Brookings report said. “In a national economy that is still 2.5 million jobs short of its pre-recession peak, health care remains a bright spot for employment growth.”

But the report also warned against complacency. The Kansas City metro area has 17 percent of its population at or above age 60, and that segment of the population – heavy users of health care – is increasing.

The “aging of the baby boom generation is also projected to increase demand,” the report said.

That means the education, skill and interest level of the workforce must keep pace with expected growth in health care jobs.

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