Someday we’ll all be employed providing health care to each other
To find the bright spots in last week’s terrible jobs report, you had to look pretty hard. Joe Weisenthal thinks he’s found it, again, in healthcare employment: of the 69,000 jobs created in May, over 30,000 were in healthcare. And healthcare hasn’t seen a negative employment month since 2007. Long term, Joe is even more bullish, calling the chart below of healthcare employment since 1990 a “thing of beauty”.
America, afterall, is “ageing. This is the industry of the future!” [emphasis original] I’ve always found this triumphalism deeply dystopic and morbid: don’t worry, in the economy of the future, we’ll all be sick and/or doctors. What’s not to like!
We should care about jobs and we should care about health outcomes. But we should only care about healthcare jobs if they improve health outcomes or the economy. And a new study from the New England Journal of Medicine says they don’t and that rising healthcare employment hurts other sectors of the economy:
Salaries for health care jobs are not manufactured out of thin air — they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck. Additional health care jobs leave Americans with less money to devote to groceries, college tuition, and mortgage payments, and the U.S. government with less money to perform all other governmental functions — including paying teachers, scientists, and social workers.
That spending can be justified if healthcare jobs provide value above alternative uses. The problem is that “there is ample evidence that incremental health care spending is producing, at best, small gains in health”. And while the US will see increasing demand for healthcare workers as the population ages, simply adding more bodies onto the payrolls of a structurally flawed system will only increase the burdensome costs that lead Americans to spend more on healthcare than the British, Canadians or Japanese.
On on the positive side, as healthcare jobs keep growing, we’ll no longer have to worry about how to encourage altruism in a market economy. We’ll all just be employed caring for each other.