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September 14, 2006Healthcare Economy
Michael Mandel
Take a look at my new cover story: "What is Really Propping Up the Economy"
Since 2001, the health-care industry has added 1.7 million jobs. The rest of the private sector? None
For years, everyone from politicians on both sides of the aisle to corporate execs to your Aunt Tilly have justifiably bemoaned American health care -- the out-of-control costs, the vast inefficiencies, the lack of access, and the often inexplicable blunders.But the very real problems with the health-care system mask a simple fact: Without it the nation's labor market would be in a deep coma. Since 2001, 1.7 million new jobs have been added in the health-care sector, which includes related industries such as pharmaceuticals and health insurance. Meanwhile, the number of private-sector jobs outside of health care is no higher than it was five years ago.
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Comments
Also, a substantial number of jobs added since 2001 have been in real estate/construction. This means that outside of health care and housing there has been a substantial loss of jobs since 2001. With the housing boom over and all the jobs that go with new construction (including the explosion of real estate agents) falling away, we may see a deteriorating situation in the job market. If you're in health care, great. If you're in RE/construction it was great until about 6 months ago. Everyone else has been watching their jobs disappear for 5 years. Is it any wonder that, despite all the numbers claiming so many new jobs, so many people are pessimistic about the job market and the economy?
Those in construction and real estate are next. I've been saying for a couple of years that the unemployment number dropped so readily partially because so many people were going off the job market to go "play" real estate agent; that little game is over.
Posted by: Brandon W at September 15, 2006 09:03 AM
An added thought: How much of this healthcare industry growth is due to aging baby boomers, and what happens to all those jobs when they pass on (i.e. die) in the course of a decade? Perhaps children being born today ought to be encouraged to build a career in funeral services?
Posted by: Brandon W at September 15, 2006 10:33 AM
You did not mention the advance degree nurses. Their wages can be significantly higher than the the the basic RN. I know many people who would never consider nursing, especially males. Yet, male and female nrses, who are CRNA'S, can easily make six figure incomes.
Posted by: George Martin, CRNA at September 15, 2006 07:59 PM
From 1980-2000 we have traded pay for jobs hoping eventually we would have both. Since 2000 we have traded jobs for goods. Those goods better keep getting cheaper because we are running low on jobs to trade.
The population is stablizing so healthcare should be stable in the future, or at least as stable as the economy, which probably won't be very stable at all.
Posted by: Lord at September 16, 2006 12:32 PM
A thought-provoking article. It would be interesting to look at this from the standpoint of international trade:
1)Patient care: what is the balance of people coming to the US to seek treatment vs people travelling to non-US countries for cheaper surgery, etc?
2)Pharmaceuticals & medical equipment: what's the import-export balance?
Posted by: david foster at September 16, 2006 05:41 PM
"Also, a substantial number of jobs added since 2001 have been in real estate / construction."
That's a very good point.
A much better analysis awaits if Mr. Mandel makes the effort to separate those real estate and construction jobs from his overly-broad "non-health care" category.
Were that to be done, his readers could then compare real estate's influence on the economy since 2001 with health care's.
I suspect real estate related job growth would easily overshadow health care related job growth in terms of both people and dollars.
Posted by: mike at September 18, 2006 06:55 AM
This article states that healthcare has created 1.7 million jobs, Housing 900,000 net total 2.5 million from 2001-2006. This is blatantly false. Going to the Dept of Labor web site, civilion labor employment level shows that in August 2001 there were 136,241,000 jobs. In August 2006 there were 144,579,000 jobs. That is 8.3 million new jobs. When an article is written, facts should be used instead of made up numbers
Posted by: Jack Hellner at September 18, 2006 02:57 PM
There may be the same number of non-healthcare jobs as it early 2001, but that itself was an unusally high number (the unemployment rate was 4.0% at the time). So the same number as then is still very good, even despite population growth over the last 5 years.
Posted by: Kartik at September 19, 2006 07:56 AM
The surprise for me was the steep decline in jobs in the high-tech sector. I work in the industry and things seemed relatively stable, or so I thought. Is that mostly outsourcing?
I didn't see a chart and am wondering if it's a continuing trend.
Posted by: VA at September 19, 2006 06:35 PM
On the other side is a recent statement by he dean (?) of the University of Virginia Medical School that calls for more doctors and nurses to take care of the ever aging population.
Posted by: gab at November 2, 2006 01:46 PM
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