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Home Publications Blogs Beat the Press Health Care Will Only Crowd Out Other Employers If We Don't Need Health Care Jobs

Health Care Will Only Crowd Out Other Employers If We Don't Need Health Care Jobs

Thursday, 18 August 2011 08:29

The NYT had an interesting, if somewhat confused, piece on whether the health care sector will continue to be a reliable source of job creation. The piece notes that the health care sector has been the one major sector that has consistently added jobs since the beginning of the downturn, however it notes that cost pressures are likely to slow the rate of employment growth in the future.

The article concludes with the comments of Joshua Shapiro, chief United States economist at MFR Inc.:

"If spending on health care continues at its current pace, it will choke out other vital sectors and end up hurting the rest of the economy, ... I think the path that we’re on now is clearly unsustainable.”

This statement is somewhat misplaced in the article. As long as we are in a period of high unemployment, then the health care industry's growth will not be constraining growth elsewhere in the economy. This would only be an issue if we have returned to something close to normal levels of employment. Of course if we have returned to normal levels of employment, then we won't be dependent on the health care sector to provide jobs.

Comments (6)Add Comment
written by denim, August 18, 2011 11:14
These people have a thinking and reasoning deficit. I really do not know why that is, but I would not hire them to sweep a floor for me. Would you think that they would know what end of the broom to use? Or how about pouring water out of a boot with the directions printed on the heel? It truly is a blessing to have a functional IQ above room temperature.
Both Ways Baker Bonks No-Brainer with Brainer
written by izzatzo, August 18, 2011 11:38
Of course if we have returned to normal levels of employment, then we won't be dependent on the health care sector to provide jobs.

Shapiro says rising health care spending will cripple the economy, same as Baker. Check.

Baker criticizes Shapiro for not acknowledging that creation of health care jobs in the short run doesn't crowd out other jobs. Check

Baker concludes that high unit cost of health care will no longer attract jobs once full employment occurs, effectively crowded out by other lower paying jobs. Check.

So health care costs were never a problem in the long run at full employment nor in the short run with unemployment. Check.

Got it.

Stupid liberals.
Was he talking jobs or spending?
written by Drew Kime, August 18, 2011 11:46
I read that as Shapiro saying the spending on healthcare is going to crowd out other spending, and relying on healthcare to provide jobs will lead to increasing that spending even more.
Types of Jobs
written by Jeff Z, August 18, 2011 12:17
While the economy today needs jobs, are we sure that the jobs provided in the Health care industry at this point are necessary for the delivery of care?

Or is it more administrative bloat, and record keeping jobs that could be eliminated and cots lowered with the proper application of technology. Adding jobs for jobs' sake can be a short run pain reliever, but then we step away from critical issue of the structure and costs of the health care industry in the United States. As long as so many people are dependent on those jobs for their livelihoods, reform remains difficult. Reform is what really is necessary, and Dean implies this in his comment.
written by Jerry Jones, August 18, 2011 4:48

I don't think you "got" anything.

Stupid looneytarians.
You read it wrong
written by Ben Gee, August 18, 2011 6:07
What most of the article was saying was that healthcare employment *might* slow down after ten years of 10-15% growth that have made it the largest sector of our economy.

The only person who was not an industry shill crying over non-existent cuts, or a health care industry professional talking about the massive and rapid growth of their profession, was the one economist pointing out that if we keep going this way, our economy is going to consist almost entirely of endless rows of decaying old people being taken care of by the youth.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.