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Posted by: Michael Mandel on January 04
I wrote this story in September 2006. The headline reads “What’s Really Propping Up the Economy: Health care has added 1.7 million jobs since 2001. The rest of the private sector? None.”
Well, here we are back to the same point again. The healthcare and social assistance sector added 37,000 jobs in December. By contrast, the rest of the private sector lost about 50,000 jobs. Over the past two months, health care and social assistance have added 66K jobs, and the rest of the private sector 8K.
In fact, I believe that the continued growth of health care employment will be the reason that the U.S. economy skirts official recession. With a baseline job growth of 30-40K per month, funded in large part by government spending, healthcare may be enough to keep the economy afloat.
In fact, healthcare is this generation’s version of keynesian economic policy. Both Republicans and Democrats are willing to “borrow-and-spend” to fund healthcare (though Bush was able to sustain his opposition to expanding the State Children’s Health Insurance Program). In fiscal year 2008, Bush’s budget calls for spending roughly $750 billion on various health-related programs, up almost $40 billion from the previous year). That’s a river of money.
You can argue about whether we should be spending more or less, about whether there should be a single payer or more competition, about whether the money is well spent or badly spent…but it’s there, and it’s paying for lots of jobs.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.