The healthcare sector is a bright spot in the economy this year, driving nearly half of the country's employment growth, but economists and experts say immigration crackdowns and looming Medicaid cuts pose a threat to future employment growth.
According to the latest non-farm pay data from the Bureau of Labor Statistics, employers added 487,000 jobs between January and August. The healthcare sector accounts for 48% of its inactive growth, expanding its employment of around 232,000 people despite employing only about 11% of its workers.
“On the labor side, healthcare growth is driving the economy,” said Neil Mahoney, a professor of economics in Stanford.
Economists say President Donald Trump's immigration crackdowns and cuts to public insurance programs are threatening to attenuate that growth. They add fears about the economy and could cause GOP headwinds in next year's midterm elections. The healthcare sector relies on unusually foreign-born workers, but according to the Commonwealth Fund, it predicts that a new law reducing federal spending on the $900 million Medicaid program annually will result in job losses for 1.2 million people nationwide under a preliminary version of the bill.
In recent years, healthcare employment growth has been most prominent in the home health sector, with nearly 300,000 jobs increasing to 1.82 million workers from August 2019 to August 2025. Employment growth is strong in hospitals and doctor offices. Nursing and residential care facilities recorded weaker numbers between 2019 and 2025 as the number of people using care at home is increasing.
Some studies have shown that healthcare employment growth is not always good for the economy. For example, the number of healthcare managers is increasing, which could potentially raise healthcare costs without bringing significant benefits to patients. However, healthcare jobs are stable and often thought to be unbearable for the recession, and the healthcare industry is now the top employer in most states. With employment growth in this sector, many places are eager to ensure healthcare workers meet the growing demand.
However, some economists said recent federal changes in recent federal policy changes and Medicaid could reduce job growth.
If the Trump administration's immigration crackdown continues, it could be difficult for healthcare providers to find enough people to hire. “Healthcare as an industry is heavily dependent on migrant labor,” says Alison Srivastaba, an economist at the Actual Employment Lab. “It has a large portion of the non-native workforce, so it will be more impacted.”
According to 2023 Census Bureau data, roughly 18% of Americans employed in healthcare were born overseas. Also, about 5% of healthcare workers were not citizens, including around 60,000 doctors and surgeons, 117,000 registered nurses and 155,000 home or personal care aides, census data shows.
Many of these workers are legally here. The Census Bureau does not track the number of licensed non-citizens living in the United States. However, even people with legal status, including permanent residents, can be vulnerable to deportation. Data obtained by the Guardian shows that the federal government deported around 200,000 people from February to August.
At the same time, some healthcare workers may choose not to study in the United States or move to the United States if they perceive them as hostile to immigration. According to State Department data, the number of immigrant visas issued from March to May fell by about 23,000, or 14%, from the same period last year. Additionally, reported illicit border crossing attempts plummeted.
Shrivastava said that in fact, strong demand for physicians is showing continuous demand among employers who are willing to support Visa's sponsorship process. However, it is not clear whether people will take them into the offer.
Meanwhile, this summer, Congress passed what Republicans called “one big beautiful bill law.” The bill has earned about $900 billion in federal Medicaid spending over a decade, according to a KFF analysis of data from the Congressional Budget Office.
Medicaid cuts are projected to bring in millions of health insurance in the coming years. Hospitals, nursing homes and community health centers need to absorb more costs of treating uninsured people by cutting services and employees.
Reductions can have a major impact on the job market. California alone has fewer jobs, with two-thirds of whom could appear in the health sector. This is according to an analysis by the University of California Belkelly Labor Center, which was implemented before the bill was finalized and signed.
“It doesn't necessarily mean that 200,000 people will lose their jobs,” said Miranda Dietz, interim director of the Labor Center's Healthcare Program. “Some people will lose their jobs. In some cases, employment growth will not be as fast as expected.”
Complicating the photo is Trump's recent firing of officials who led the Labor Bureau's statistics branch, leading to concerns that employment data will not be released from political influence.
If, or when, Medicaid cuts affect employment in the healthcare sector, or when, or Medicaid cuts, Medicaid cuts will not be revealed, but there are signs that could soften them. Federal data showed a significant decline in job openings in the healthcare and social assistance sector in July. Although actual job posting data also shows a decline in some healthcare sectors, Laura Ulrich, Director of Economic Research in North America at the Actual Employment Lab, overall, noted that the posts are above inclusive levels.
For now, the BLS forecasts show that employment growth is expected to be high, especially among nurse practitioners, physician assistants and home health aides.
Many healthcare jobs require years of higher education, but they become expensive, with family doctors usually earning over $240,000 a year, and registered nurses usually earning around $94,000 a year.
Joshua Legiano, president of the Sacramento branch of the California Nursing Students Association, said she was “cautiously optimistic” to immediately acquire a job as a registered nurse when she graduated in December. He said he has completed a nursing clinical rotation that gives him a real-world experience conditioning him for long shifts.
Leijano said while hospitals in his area are expanding their capabilities, some veteran nurses have left their profession burning out from the community pandemic and creating openings. “Now I think the big things are just staying on top of every application cycle,” he said.
Healthcare jobs that don't require that much training tend to pay much less. The median annual revenue for the US was around $35,000 for around 4.4 million home health and personal care aides last year, roughly equivalent to waiters and waitresses' payments, federal data.
The growth of healthcare jobs is particularly beneficial for women, Ulrich said. Recent practical studies show that almost 80% of healthcare workers and social assistance workers are women. The survey found that female workers have accounted for more than 1 million new medical jobs in the past two years.
Shrivastava said the sector is resilient. Because Americans generally do not view health care as a luxury good. Health insurance costs are on track with the biggest jump in at least five years. Medical expenses are also often centered around the elderly and very elderly. This is a group that grows dramatically as the baby boomer age. The number of Americans increased from 34 million in 1995 to 61 million in 2024.
“A lot of these healthcare jobs are helping to grow the population of older Americans,” Ulrich said. “So it's not surprising that we're seeing growth there. But I think the surprising thing is how biased it is.”
Phillip Reese is a data reporting specialist and associate professor of journalism at California State University Sacramento.
This article was produced by KFF Health News, publishing California Health Line, an editorially independent service of the California Healthcare Foundation.
