In another sign of Washington's uneven and inelegant recovery, a cooling tech industry has been overtaken by a cash-strapped health care sector as the state's hottest job market.
As of April, six of Washington's top 10 employers as measured by job openings were health care companies, according to a monthly survey of online job postings by the state Employment Security Department. Among them were Renton-based Providence Health & Services, Seattle-based Virginia Mason Medical Center and Minnesota-based United Health Group.
By occupation, there were more openings for registered nurses than for any other position in Washington, state data shows.
Meanwhile, the state's tech sector, which had dominated job rankings through much of the pandemic, has seen its fortunes reverse.
Amazon, the Seattle-based online retailer and cloud services provider, was ranked only fifth by job postings in April, down from No.1 a year earlier. Job openings for software developers fell by 86% from a year ago, to 1,225, pulling the occupation's ranking from first to sixth.
But health care's job market victory was pyrrhic — or perhaps, anemic — given that the number of health care job openings in April was just a fraction of levels a year ago, as health care employers scale back in the face of economic pressures and heavy financial losses.
"There are significant financial headwinds for the health care industry, especially hospitals," said Keegan Fisher, chief human resources officer for the north division of Providence, which posted a $1.7 billion operating loss for 2022, and which saw its own job postings fall nearly 70% since April 2022, according to state data.
Job openings aren't the perfect measure of the job market. They can undercount employers that don't routinely post openings online, such as construction, which added 4,300 jobs in April, or more than twice as many as health care.
But job openings do offer a snapshot of employers' hiring behavior.
And according to some experts, that snapshot shows a state economy that has been bruised by high interest rates, tech turmoil and, at 4.3% in April, the nation's third-highest unemployment rate — but which has so far avoided full-blown recession or broader job losses.
"While hiring is slowing down considerably, we have yet to see evidence of rising unemployment, particularly in King and Snohomish counties," says Jacob Vigdor, an economist with the University of Washington Evans School of Public Policy who follows state and local job markets.
But "this could all change," Vigdor notes, adding that state workers and employers alike will be "on tenterhooks for the next few months wondering if the economy will tip into recession."
The shift in job-market ranking by health care and tech wasn't a surprise.
Tech hiring peaked last summer as employers like Amazon and Microsoft reversed their aggressive pandemic-era growth with layoffs and hiring freezes.
From the peak in September 2022 to April 2023, hiring by companies in the "information" sector, which includes most tech workers, fell by 2%, even as overall state employment grew by nearly 2%, according to state data.
It has been a different story in health care.
After cuts early in the pandemic, health care-sector hiring has recovered somewhat — employment is up 3.3% since September — and demand remains fairly strong. That's partly due a longstanding labor shortage that was worsened by the pressures of the pandemic, which saw many health care workers exit the industry or the area.
"There are at least two openings for every healthcare professional in the market," says Providence's Fisher. Demand is sharpest for "bedside" registered nurses, especially in the hyper-competitive Seattle-area market, Fisher adds.
Despite that demand, many health care companies are actually posting fewer openings. Job openings at Providence fell from 2,679 in April 2022 to 809 in April 2023, according to ESD data. In-state openings at California-based Kaiser Permanente fell from 3,287 to 214 over the same period.
The shrinking number of openings partly reflects the ailing finances of the health care sector. Hospitals especially have been squeezed by rising costs for labor, medication and supplies — up 6% statewide in 2022 — and flat Medicaid reimbursement rates, according to the Washington State Hospital Association. Overall, Washington hospitals reported losses of $2.7 billion for 2022, according to the trade association.
State lawmakers enacted several measures this year to ease hospitals' financial problems. In the meantime, losses have pressured providers to focus on filling front-line jobs, health industry officials say.
Providence has reduced openings for administrative and back-office positions to "prioritize patient-facing positions," Fisher said. While those other roles are important, Providence needs to "replenish the workforce that left us throughout the pandemic."
Despite the pressures hitting both health care and tech, the state's overall economy is showing remarkable staying power, economists say.
Unemployment, though on the higher side, is actually down from earlier this year. Hiring, if weak in tech, has been strong in other sectors, such as construction, where total employment jumped 7.2% from April 2022 to April 2023, and aerospace manufacturing, up 8.2%.
Further, while the total number of job openings is coming down from pandemic highs, they remain unusually elevated, said Anneliese Vance-Sherman, a regional economist with the Employment Security Department who covers the Seattle-area job market.
In fact, more Washingtonians quit each month than get laid off, said Vance-Sherman, citing federal data, which indicates people remain confident they can readily find another job. "They're feeling bullish on the other opportunities, partially because there are a lot of job openings out there," Vance-Sherman said.
For that matter, despite healthcare's curr ent financial struggles, economists remain confident of its prospects as a major employer, given that an aging population will only need more medical services.
This year, the number of 65-year-olds is likely to surpass the number of 18-year-olds for the first time in U.S. history, according to new research by the UW's Vigdor.
Until recently, that demographic reality, and its consequences for health care employment, was often overshadowed by the focus on tech-sector growth. The conventional wisdom, says Vigdor, was "that if you want to be employable, you should learn to code."
But "with a rapidly aging population ... the demand for health care is only going to increase," says Vigdor.
"In the labor market as elsewhere," he adds, "demography is destiny."
