September 28, 2006


Caption: This baby turtle should consider a career in health care. And stay off the roads.

The face of work continues to change in the US. According to the Economic Policy Institute, only 14.2 million Americans now work in manufacturing, down by 3.4 million from the last manufacturing peak year (1998).

A big part of this decline can be traced to the record US trade deficit, which is now at 6 percent of GDP. Real wages for factory workers declined 2.7 percent over the last year, although productivity has increased.

Meanwhile, Business Week reported in the Sept. 25 issue that the real growth engine for the national economy has been health care, which added 1.7 million jobs since 2001:

Almost invisibly, health care has become the main American job program for the 21st century, replacing, at least for the moment, all the other industries that are vanishing from the landscape. With more than $2 trillion in spending--half public, half private--health care is propping up local job markets in the Northeast, Midwest, and South, the regions hit hardest by globalization and the collapse of manufacturing.

If current trends continue, health care will account for 30 to 40 percent of new jobs created in the next 25 years.

While El Cabrero is all in favor of jobs, overdependence on this sector is not a sign of a robust and varied economy. The problem is not that the health care sector is growing (it is pretty important after all) but that other sectors such as manufacturing aren't.

These issues are related. The lack of a universal health care system in the U.S. is harming the ability of domestic manufacturers to compete with companies in countries that have one.

At some point, the related issues of health care and the decline in manufacturing will have to be dealt with at the policy level.


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