Thursday, February 21, 2013

Unemployment to Stay High for a Long Time ... Health Care Jobs Account for All Jobs Created Since 2000

The politicians continue to 'feel our pain' and assure us that they intend to make us feel better by creating jobs and economic growth.

Just how they will accomplish that fete nobody knows and certainly not the political aristocrats. They're too busy fighting among themselves and calling each other names. Meanwhile, the economy remains stagnant and job growth remains elusive.

As a matter of fact, their political posturing, name calling and do nothingness will only result in more deficits and debt accumulation accompanied by weak economic growth as far as the eye can see. And perhaps surprisingly, at least to some people, we've experienced nothingless in the way of real job growth for more than a decade now.

Here are a few facts that you may find interesting. Whether what they reveal is a good or bad thing, I'll let you decide. That said, my guess is you'll be at least a little surprised about where all the U.S. job growth has come from since the year 2000.

My judgment says that this surprise isn't a pleasant one, but you can judge for yourself.

We need more jobs in America, of course, but is it really a good thing for all the nation's job growth this century to have come from the already inefficient, unaffordable and far too expensive U.S. health care sector? I think not.

Health Care Aside, Fewer Jobs Than in 2000 presents the facts:

"(Here's) one other important accomplishment of the much-maligned health care industry. Not only has it added more jobs than any other sector, but without it, there would actually be slightly fewer jobs in the United States today than in 2000.

In 2000, the economy had about 121 million non-health-care payroll jobs. Today, on a seasonally adjusted basis, there are 120 million non-health-care jobs. Meanwhile, the health care industry has added about 3.6 million jobs in that time frame, growing about 33 percent (14.5 million health care jobs today versus 10.9 million in 2000).
Source: Bureau of Labor Statistics, via Haver Analytics. January 2013 figures are seasonally adjusted; 2000 figures are annual numbers.
There have been times since 2000 that the country has had more non-health-care jobs on net than it had at the turn of the millennium, but that has not been true since late 2008. Here’s a look at the longer-term monthly numbers. Note that the vertical axis does not go down to zero to better show the change:
Source: Bureau of Labor Statistics, via Haver Analytics. Note that the vertical axis does not start at zero, better showing the change over time. 
Is it a good thing that the health care industry has been basically keeping the job market afloat? That depends on your perspective.

Health care is a notoriously inefficient industry — in 2008, there were five people performing administrative support for every one doctor — and a lot of the jobs that have been created in recent years probably involve feeding that inefficiency.

Market pressures don’t force streamlining in health care the way they do in other industries. That’s partly because of the way Americans pay for health care and the way the government subsidizes health care consumption. It’s also partly because health care is relatively shielded from international competition, since many medical services are difficult to offshore. It’s hard to have someone draw your blood from India, for example.

In any case, given how weak the economy is right now, it seems unlikely that the health care industry is snatching many workers away from other industries where their skills would be put to more productive use."

Summing Up

Health care employment, government employment and private sector wealth creating employment are three entirely different things with three entirely different impacts on our economy.

All mean jobs, but only private sector non-health care job growth results in meaningful and lasting employment which will result in a stronger national economy.

The conclusion is sad but simple. More government jobs and more health care workers relative to private sector jobs and workers will only make us weaker as a nation and more financially burdened as well.

That's my take. What's yours?

Thanks. Bob.

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