Jobs shift away from industries that provide health insurance to their workers
May 12, 2004

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Snapshot for May 12, 2004.

Jobs shift away from industries that provide health insurance to their workers
In the three years since the beginning of the recession, jobs have shifted from industries that are more likely to provide health coverage to their workers to industries that are less likely to provide health coverage. Nationwide, industries in which the share of total jobs has declined insure 68% of their workers, while 55% of workers are insured in industries in which the share of jobs has increased. This pattern is widespread around the nation, with 45 of the 50 states showing this shift (see map).

Most states still have not returned to pre-recession employment levels (see the EPI Web site JobWatch.org for details), and jobs have been shifting from high-wage to low-wage industries (this phenomenon is described in more detail in the  January 21 Snapshot). The shift away from industries that are more likely to provide health coverage to their workers is another sign that the current economic recovery is lagging in critical measures of labor market strength.
 
This shift also suggests that recent disturbing trends in health insurance coverage may continue. In 2002 (the most recent year for which data are available), 3.7 million more Americans had no health insurance than two years earlier, bringing the total uninsured to 43.3 million. Of these uninsured, 26 million were workers, over half of whom were working full time for the entire year.

Despite the increase of individuals insured through Medicaid and the State Children’s Health Insurance Program, the U.S. health care system still relies heavily on employer-provided health insurance. Making affordable health insurance less available at the workplace will have a significant impact on the living standards of working families.

Table:  Health insurance coverage in growing and contracting industries, beginning of recession through March 2004

Source for health insurance coverage statistics: Hoffman, Catherine. Health insurance coverage in America: 2002 data update. Kaiser Commission on Medicaid and the Uninsured. December 2003.

This Snapshot was written by EPI economic analyst Jeff Chapman and EPI economist Elise Gould.

Methodology: Employment data come from the Bureau of Labor Statistics Payroll Survey.  Health insurance data, from the March Current Population Survey, are the share of employees covered by insurance from their own employer for each of the nine Census divisions (groups of states).  We begin by calculating industry shares of employment and then take the difference in the shares over the period of interest (disaggregated to the level of 12-14 sectors, depending on the state). These changes are negative for industries contracting as a share of the total and visa-versa. We then create industry weights by taking each change as a share of the total change separately for contracting and expanding industries (thus, we have weights that sum to one for both groups). These weights are multiplied by average annual health insurance rate for the 12-14 industries in 2002. Note that we hold this health insurance vector constant so that the results are only affected by the shift in industry shares, not by changes in health insurance provision within industries.