Health Care Stays Healthy, 2008 Hurts Other Industries

by Jamie Walden  on Monday, Mar. 2, 2009 12:00 am  

(To view the list of the largest employers in Arkansas, click here. A spreadsheet version is also available.)

As the nationwide economic tailspin continues, several of Arkansas' largest employers, particularly one industry, exhibited resilience last year.

Health care, as reflected by this year's list and a recent report by the Arkansas Department of Workforce Services, was a bright spot in the state's anemic job market, weakened from losing so many jobs in the last few months.

Educational and health services grew by 4,000 jobs from December 2007 to December 2008, most of which came from health care and social assistance like elderly care, according to the DWS report. A large portion of the growth – 1,500 jobs – occurred between November and December 2008.

Phil Matthews, president and chief executive officer of the Arkansas Hospital Association, attributed health care's aberrant performance in 2008 to the revenue that hospitals receive from Medicare and Medicaid.

However, another revenue stream is not so immune, Matthews said. As the economy worsens, a decrease in revenue from private insurance – a hospital's other main source of revenue – could cause the industry to go the way of the others.

Health care does have one other thing going for it. "[People] can't plan when they get sick. They get sick in good times and they get sick in recessionary times," Matthews said.

An overview of every other industry, however, reveals sobering statistics.

A battered manufacturing industry shed 10,000 jobs from December 2007 to December 2008, with 1,700 of those losses occurring from November to December, according to the DWS report.

For the same 12-month period, trade, transportation and utilities plunged by 7,100 jobs, while leisure and hospitality declined by 2,000. Construction lost 1,400 jobs during the year. Financial activities, which include finance, insurance, real estate and rental and leasing, declined by 700 jobs, while professional and business services lost 1,000 jobs in 2008.

Government Still Hiring

The performance of the heavyweights on this year's list indicates government jobs are in good shape. The perennial largest employer, Arkansas state government, grew 2.2 percent to 55,871 employees. Federal government jobs rose a slight 1.2 percent to 20,939.

Wal-Mart Stores Inc. of Bentonville, despite growing year over year and holding its rank as the state's second largest employer, sent a chill down the spines of Arkansans when it announced a layoff of 700 to 800 employees at its corporate offices in Bentonville and Rogers. The paring of the world's largest company, which traditionally benefits from tough market conditions, illustrated the magnitude of the economic crisis.

Tyson Foods Inc. held the No. 3 spot, growing 7.8 percent to 24,005 employees. The majority of the increase came from Tyson adding chicken de-boning operations at several plants, the company said.

Meanwhile, Pilgrim's Pride Corp., another poultry processing company, shed more than 30 percent of its staff in 2008. In July, the company, based in Pittsburg, Texas, shut down the "tray-pack chicken business" at its facility in El Dorado, consolidating the operation to other existing locations. The move resulted in the elimination of 600 of the 1,215 jobs at the location.

One month later, Pilgrim's idled its chicken processing plant in Clinton, which put 600 more Arkansans out of work. The layoffs knocked Pilgrim's from its No. 9 spot on last years list down to No. 19.

O.K. Industries Inc. of Fort Smith underwent a restructuring that included automating some of its processes, including meat processing and de-boning. The restructuring, which also included some reductions across the board, resulted in 400 lost jobs.

In addition to Tyson's growth, however, the poultry industry got a boost when Simmons Foods Inc. of Siloam Springs bought Peterson Farms' broiler operations in Decatur in July. The acquisition added more than 700 employees to Simmons, bumping it to No. 15 on this years list – a sizable leap from its spot last year as No. 24.

Hospitals See Growth

Almost all the hospitals on this year's list experienced year-over-year growth, particularly Sisters of Mercy Health System of Chesterfield, Mo.

The hospital system acquired an existing health clinic in Hot Springs, which contributed to its nearly 12 percent growth to 5,493 employees in Arkansas.

Arkansas Children's Hospital of Little Rock grew by about 300 employees, as did Sparks Health System of Fort Smith.

Last but not least, newcomers to the list this year include Jefferson Regional Medical Center of Pine Bluff, AT&T and Verizon Wireless.

Verizon officially completed its acquisition of Alltel in January of this year. Verizon now employs about 2,900 in Arkansas, exactly 200 more than its competitor AT&T.



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