The Phoenix metro area has posted the nation’s second-highest rate of job growth in the private education and health services sector since the end of the recession, according to a new report.
Phoenix gained 34,200 jobs in those fields, according to an interactive report from the Urban Institute, which said the 14.9 percent growth from mid-2009 to November was second only to the New Orleans’ metro area job growth in that sector.
Experts say the growth in Phoenix is being driven by the expansion of for-profit colleges there and by a health sector that is playing catch-up to its population. The growth over the last five years was an even greater 25.1 percent, so that the health and education sector now accounts for 15 percent of Phoenix’s overall job market.
Tucson gained just 1,500 jobs in the sector, but health and education jobs already account for just over 16 percent of the area's employment.
Fred Lockhart, executive director for the Arizona Private School Association, said jobs in Phoenix’s private-education sector have grown because Arizona’s three public universities cannot accommodate a state so large. That creates an opportunity for private colleges.
“There is a rather robust market for those postsecondary institutions,” he said.
Among those for-profit schools filling the void are the University of Phoenix and Grand Canyon University. Lockhart said as the student population of those private schools continues to grow, more professors, staff and faculty will be needed to provide services.
“Those numbers will continue to grow as student services are in demand,” he said. “Education has become this commodity that must be delivered to anyone, anytime, anywhere.”
As for the growth in Phoenix’s health services, jobs have increased in recent years as the sector played catch-up to the area’s population growth, said Lee McPheters, a professor at the W. P. Carey School of Business at Arizona State University.
Phoenix is “an area that’s been underserved by doctors and hospitals until recently,” said McPheters, the director of the JPMorgan Chase Economic Outlook Center at the school. “As the population grows, you get more and more healthcare workers.”
McPheters said Phoenix “is moving towards being known as a medical center,” noting the growth of the Mayo Clinic in the area and the University of Arizona’s expansion of its downtown Phoenix medical campus.
“As that concentration grows, you attract more,” he said.
Margery Turner, vice president for research at the Urban Institute, said the sector is not a huge source of jobs for Phoenix, but it has experienced steady growth.
“In the recovery, there’s been a lot of volatility as we look across metros over time, but this education and health services sector appears to be growing very steadily,” Turner said. “Every time period that we look at, we see positive growth.”
The health services part of the sector includes everything from doctors, dentists, pharmacists and nurses down to janitors and other staff at both for-profit and nonprofit hospitals.
The private education part of the sector is made up of professors, teachers and other staff at for-profit colleges and private schools. It does not include public education employees, like ASU employees and public school teachers, according to the Urban Institute.
The institute said it lumps health and education together into one job sector because that’s how the information is categorized in many local areas by the U.S. Bureau of Labor Statistics.
While the Phoenix growth has been healthy, it may be coming to a halt soon, said one expert.
With recent cuts to Medicaid, the health services sector has begun to see salary and hiring freezes and even some layoffs, said Pete Wertheim, vice president of strategic communications for the Arizona Hospital and Healthcare Association.
“The hospital industry was strong during the early part of the recession, but as we’re pulling out of the recession… there’s been hiring freezes, layoffs and I would consider the hospital industry as a whole in contraction mode right now,” Wertheim said.