Friday’s announcement of an amended labor contract for New York City-area hospitals and nursing homes sends a contradictory message about the financial condition of the state’s health-care industry.

Just last week, hospitals and nursing homes told state lawmakers that they faced a “dire fiscal crisis” and pleaded for more money from the state budget.

Ten days later, however, 90 downstate institutions approved big wage hikes for members of health-care labor union 1199 SEIU workers – after reopening a contract that wasn’t due to expire for another 18 months.

According to a report in Politico, the extended contract includes raises of 7 percent in July of this year, 6 percent October 2024, and 5 percent in October 2025. 

That would more than double the increases in the current contract, which were 3 percent each in October 2023 and 2024.

Both sides of the deal – which came together in a matter of days – framed the higher pay as their response to an industry-wide shortage of workers.

“At a time where hospitals across the nation are struggling to hire healthcare workers, this agreement is essential to help New York’s healthcare institutions attract and retain the talent they need to provide the best healthcare in the world,” Marc Kramer, the president of the League of Voluntary Hospitals and Homes of New York, was quoted as saying.

According to federal data, however, New York City hospitals currently employ more people than ever before – having fully bounced back from pandemic-related losses by early 2022. 

As seen in the chart below, city hospitals employed 155,600 workers as of December, which is 4,900 or 3 percent more than their previous peak in March 2020, according to figures from the Bureau of Labor Statistics.


Statewide, hospital employment is roughly equal to where it was before the coronavirus, suggesting that institutions outside the city have generally been slower to replenish their ranks.

The federal data paint a different picture for nursing homes: Within the city, employment at skilled nursing facilities as of December remained 2,100 or 5 percent lower than it was in March 2020. Statewide, nursing home employment was down 14 percent.

Nursing homes are under particular pressure to add employees under minimum staffing standards enacted in 2021. At the same time, the number of residents remains lower than it was before the pandemic. As of February, nursing homes reported that 87 percent of their beds were occupied, compared to 92 percent in March of 2020.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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