America’s job growth almost exclusively in health care September 16, 2006Posted by Tom in Community, Workforce.
BusinessWeek offers a fresh perspective on the job market over the past five years:
Without [health care,] 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.
Sure, housing has been a bonanza for homebuilders, real estate agents, and mortgage brokers. Together they have added more than 900,000 jobs since 2001. But the pressures of globalization and new technology have wreaked havoc on the rest of the labor market: Factories are still closing, retailers are shrinking, and the finance and insurance sector, outside of real estate lending and health insurers, has generated few additional jobs.
Perhaps most surprising, information technology, the great electronic promise of the 1990s, has turned into one of the biggest job-growth disappointments of all time. Despite the splashy success of companies such as Google (GOOG ) and Yahoo! (YHOO ), businesses at the core of the information economy — software, semiconductors, telecom, and the whole gamut of Web companies — have lost more than 1.1 million jobs in the past five years.
I just returned home from a week of high-level briefings on the State of the Workforce in northeast Indiana. One of our many conclusions offered was that health care delivery (I have to differentiate from health care manufacturing, as northeast Indiana has a large orthopedics products manufacturing industry base) the the region’s shining star.
Health care delivery is the region’s only “high-wage, high-growth” industry. We determine high-wage to mean that the industry offers an average wage higher than the average regional wage. High-growth means that the concentration of industry in the region is higher than the national average, and that the industry has not seen a job decline. By that simple standard, only health care deilvery applies.
The BusinessWeek article reinforces what we’re seeing in the heartland – that the economy is in tough shape, and that “old economy” business models are failing (most recent evidence: Ford Motor Company & Malcom Gladwell’s recent New Yorker article on pensions). At a macro level, the economy needs to be retooled…but in what direction? Let’s allow BusinessWeek to offer a tantalizing suggestion:
The expansion of health care is also spinning off related jobs. Cleveland Clinic Innovations, a unit that funds startups, has already created 19 companies in its five years of existence. Together they employ about 186 people, including more than 50 in the Cleveland area. One, Cleveland BioLabs Inc. (CBLI ), went public in July and trades on NASDAQ. “We like to say that the New Economy is alive and well in the 40 blocks of the Cleveland Clinic,” says Christopher Coburn, executive director of Cleveland Clinic Innovations.
It’s not a lot of jobs…and it’s probably about 15-20 years late…but it’s something. And that’s more than Ford can say.
UPDATE: Here’s a newly found chart from the BusinessWeek author’s blog (additional commentary at the blog link) – I think it better explains the growth of health care…and everything else.