The health care sector is a bright spot in the economy this year, driving nearly half of the nation’s employment gains, but economists and experts say immigration crackdowns and looming Medicaid cuts pose a threat to future job growth.
Employers added 487,000 jobs from January to August, according to the latest nonfarm payroll data from the Bureau of Labor Statistics. The health care sector accounted for 48% of that lackluster growth, expanding by about 232,000 jobs, even though the sector employs only about 11% of workers.
“On the labor side, health care growth is driving the economy,” said Stanford economics professor Neale Mahoney.
Economists say President Donald Trump’s immigration crackdown and cuts to public insurance programs threaten to dampen that growth. They could add unease about the economy and cause headwinds for the GOP in next year’s midterm elections. The health care sector is unusually dependent on foreign-born workers, while a new law trimming federal spending on the $900-billion-a-year Medicaid program is projected, based on a preliminary version of the bill, to trigger the loss of 1.2 million jobs nationwide, according to the Commonwealth Fund.
In recent years, health care job growth has been most pronounced in the home health sector, rising by nearly 300,000 jobs to 1.82 million workers from August 2019 to August 2025, as millions of older residents hire workers to visit and take care of them, Mahoney said. Job growth has also been strong at hospitals and doctors’ offices. Nursing homes and residential care homes posted weaker numbers from 2019 to 2025 amid an increase in the number of people using caregiving at home.
Some research indicates that health care job growth is not always good for the economy. For instance, a growing number of administrators in health care may raise health care costs without providing much benefit to patients. Yet, health care jobs are considered stable and often recession-proof, and the health care industry is now the top employer in most states. Even with job growth in the sector, many places remain desperate for health care workers to meet rising demand.
But several economists said recent federal policy changes on immigration and Medicaid might drag down job growth.
If immigration crackdowns by the Trump administration continue, it could get tough for health care organizations to find enough people to hire. “Health care as an industry is pretty reliant on immigrant labor,” said Allison Shrivastava, an economist with the Indeed Hiring Lab. “It has a large share of non-native labor force, so it’s going to be impacted more.”
About 18% of Americans employed in health care were born abroad, according to 2023 Census Bureau data. And about 5% of health care workers were not citizens, including about 60,000 doctors and surgeons, 117,000 registered nurses, and 155,000 home health or personal care aides, census data shows.
Many of those workers are here legally; the Census Bureau does not track how many noncitizens are living in the U.S. with authorization. But even those with legal status, including permanent residents, may be vulnerable to deportation. The federal government deported about 200,000 people from February through August, a significant increase from prior months, according to data obtained by The Guardian.
At the same time, some health care workers may choose not to study in or move to America if they perceive it as hostile to immigrants. The number of immigrant visas issued by the United States from March to May fell by about 23,000, or 14%, from the same period last year, State Department data shows. In addition, reported unauthorized border crossing attempts have plummeted.
Shrivastava said Indeed’s job posting data shows continued strong demand for doctors among employers willing to help with the visa sponsorship process. But it’s not clear if people will take them up on the offers.
Meanwhile, Congress this summer passed what Republicans called the “One Big Beautiful Bill Act,” which was quickly signed by Trump. That bill makes about $910 billion in cuts to federal Medicaid spending over 10 years, according to a KFF analysis of data from the Congressional Budget Office.
Medicaid reductions are projected to cause millions to be without health insurance in the coming years. Hospitals, nursing homes, and community health centers will have to absorb more of the cost of treating uninsured people by reducing services and employees, or else close altogether.
The cuts could have a significant impact on the job market. California alone could see up to 217,000 fewer jobs, of which two-thirds would be in the health care sector, according to an analysis by the University of California-Berkeley Labor Center conducted before the bill was finalized and signed.
“It doesn’t mean necessarily that 200,000 people are going to lose their job,” said Miranda Dietz, interim director of the Health Care Program at the Labor Center. “Some people will lose their job, and in some cases, the job growth won’t be as fast as anticipated.”
Complicating the picture is Trump’s recent firing of the official who headed the Labor Department’s statistical branch, leading to concerns that jobs data will not be free from political influence.
It’s not clear when — or if — immigration actions and Medicaid cuts will affect hiring in the health care sector, but there are signs of potential softening. Federal data showed a significant decline in job openings in the health care and social assistance sector in July. Indeed’s job posting data also shows a decline in some health care fields, but Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab, noted that, overall, postings remain above prepandemic levels.
For now, job growth is expected to remain high, particularly among nurse practitioners, physician assistants, and home health aides, according to BLS projections.
Many health care jobs require years of higher education but result in high pay, with family physicians typically making more than $240,000 a year and registered nurses typically taking in about $94,000 a year.
Joshua Lejano, president of the Sacramento State chapter of the California Nursing Students’ Association, said he is “cautiously optimistic” that he will quickly land a job as a registered nurse when he graduates in December. He said he is completing nursing clinical rotations that give him real-world experience that will condition him for long shifts.
Lejano said hospitals in his area are expanding capacity while some veteran nurses are leaving the profession due to burnout from the covid pandemic, creating openings. “Right now, I think the big thing is just staying on top of all the application cycles,” he said.
Health care jobs that don’t require as much training tend to pay much less. Median annual earnings for the U.S.’ roughly 4.4 million home health and personal care aides were about $35,000 last year, roughly equivalent to pay for waiters and waitresses, federal data shows.
The growth in health care jobs has been especially beneficial for women, Ullrich said. Nearly 80% of health care and social assistance workers are female, according to a recent Indeed study. The research found that female workers accounted for more than a million new health care jobs in the last two years.
The sector is resilient, Shrivastava said, because Americans generally do not view health care as a luxury good: They pay for it in good times and bad. Health insurance costs are on track for their biggest jump in at least five years. Also, health care spending often centers on old and very old people, a group growing dramatically as baby boomers age. The number of Americans 65 or older rose from 34 million in 1995 to 61 million in 2024.
“So many of these health care jobs are to support the growing population of older Americans,” Ullrich said. “So that’s not surprising that we’re seeing growth there. But I think what is surprising is how lopsided it is.”
Phillip Reese is a data reporting specialist and an associate professor of journalism at California State University-Sacramento.
This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.