The Engine of US Jobs 324
eberta writes, "BusinessWeek has an interesting take on the US job situation, What's Really Propping Up The Economy. I think many of us have felt the US tech job market was stagnant and this article has insights into why this economy is so hot, yet not from our perspective. The spoiler is the business of health care — which will come as no surprise to anybody who has looked through the help wanted section lately. BusinessWeek has some opinions on how IT should play a bigger role in the health care industry."
Invisible Job Benefits (Score:4, Interesting)
Who pays the bills? (Score:5, Interesting)
Speaking as a non-american, it's already one of the great ironies of the 'great american economy' - increasing numbers of people will end up working in the healthcare industry, but won't be able to afford to use it for themselves or their families. Yet giving everyone affordable access to healthcare, increasing productivity, is decried as socialist, while letting people be crippled by the financial burden of a major illness is true-blue American. Lovely.
Questionable basis (Score:4, Interesting)
From the start I'm inclined to believe the article is flawed from a statistical perspecitve. Where they quote the relevant unemployment rates of Germany and France in comparison to the US they do so without mention that the European countries use a measure which would see the US figure at over 12% (They count the underemployed as unemployed, so if you're a coder working a few hours flipping burgers you show up as unemployed).
That said with an aging population health care will continue to be a growing employer at all levels.
What if... (Score:5, Interesting)
Factors contributing to rising demand for health care:
1) Aging population. Even in the US, which has one of the highest birth rates of any western country, the population as a whole is getting older. With the baby boomers about to retire, this is going to hit us hard and fast.
2) Obesity and other dietary/behavioral risk factors. There's been a bit of evidence that the negative consequences of obesity were overblown, but it's still bad news.
3) The most subtle and nefarious of all: advances in medicine. There's not really any demand for drugs that haven't been discovered yet, or surgeries that can't yet be performed successfully.
This last point is the scariest of all. Suppose we developed a way to give people an extra 10 years of life, but it cost a million dollar per person. We simply couldn't afford to provide it for everyone. What do we do? The American solution is to offer the procedure to anyone who can pay for it. The Canadian way would be to have a 90-year wait list so most people died before they could get the procedure. Other countries would perhaps find other ways of rationing health care, but the point is that the inevitable consequence would be rationed health care. Maybe the market would do the rationing, maybe the government would, maybe the Grim Reaper would, but rationing there would be.
So, what do people think? Obviously, we should try to make health care more efficient, but, if it's too expensive to give everyone full access, how do we sort things out?
Re:Who pays the bills? (Score:5, Interesting)
Don't worry about American healthcare workers not being able to afford health care, many of them are taking "Medical Holidays" to places in Asia where they can get cheap operations. Yes many years ago that might have been a bit risky, but these days in places like Taiwan, American patients can get first class treatment at 1/10th of the price and it's probably safer than being treated by overworked American medical staff.
Check out articles found by google http://www.google.com/search?num=50&complete=1&hl= en&lr=&safe=off&q=medical+tourism+taiwan/ [google.com]
BTW the article missed out Lawyers from the groups that will benefit.
But healthcare doesn't make value..... (Score:5, Interesting)
Healthcare does not really build value. Nothing has been made because Aunty Tilly got a $20,000 bypass instead of a $5 bottle of asprin.
In the way economists measure things, the Exxon-Valdez disaster was a huge economic success.
One thing that really drives up the GDP is esculating housing costs. When a $100k house's value increases to $300k this is seen as a $200k increase in the economy.... but this is just bullshit, no value has been created. Sure it can stimulate the economy because Aunt Tilly can now take a $20k loan against her house and get a bypass and this trickles into the economy. Or Joe Sixpack might buy a new Chevvy... However, you should really see this as what it is: hyper inflation in housing prices.
If the "value" of a loaf of bread increases from $1 to $5, then that is seen as inflation, not growth. When a house goes from $100k to $300k this should be seen as inflation too.
Futures market on the future of IT jobs (Score:3, Interesting)
The above link is a futures exchange (where you bet only your reputation) on the future of ITJOBS in the US. You can compare articles like this to the consensus in that market. The market above includes a measure of whether or not the jobs we will still have in the future are well paying jobs or not. The current market consensus opinion is pretty rosy.
Re:"hot" economy (Score:2, Interesting)
The more you own, The more you earn
The less you pay, on tax returns
But if you're poor, no need to frown
Just trust in Reagan, wait for trickle down
The millionaires, can pay no tax
it's just the tips they give their waiters that get axed
But let the poor, keep what they've got
There'll be more jobs for maids and butlers and whatnot
- Terry Phelan
KFG
Time For All the Baby-Boomers to Stand Up! (Score:5, Interesting)
There is really no mystery here. More old people means larger government spending on health care. More spending means more jobs in the health care industry.
There are 2 other factors that have increased health-care spending. First is the millions of illegal aliens who have no insurance. They usually go straight to the emergency room, where physicians do not refuse service (even to people without insurance). The services are not paid by the illegal aliens but are paid by the government.
Illegal aliens do become sick. They often work at grueling, backbreaking work. There is no incentive for American businesses (that employ illegal labor) to improve the working conditions because they can always find another desperate laborer if the current laborer becomes too sick to work. After all, the USA has an open-border policy with Mexico and the rest of South/Central America.
The other factor that has increased health-care spending is the excessive hours which Americans are forced to work. "60 Minutes", the renowned CBS program, recentedly reported that the average American now works more hours than even the average Japanese. These additional hours of work take a severe toll on workers' health. For example, 60+ hours of computer work per week leads to cardiovascular problems due to lack of exercise. The excessive hours also strain family relations, leading to the need for counseling or psychotherapy. In Silion Valley, the divorce rate is about 30% higher than the national rate [nytimes.com].
healthcare jobs already being outsourced (Score:4, Interesting)
The appeal is obvious: Heart surgeries and hip replacements in such countries as India, Thailand and Mexico can be had for less than one-third the cost in the USA.
At the same time, medical costs in the USA are rising rapidly, with no end in sight.
Seth
Various U.S. Economic problems (Score:4, Interesting)
The U.S. economy probably is less healthy than it appears to be on the surface. We have a huge federal budget deficit as well as a huge trade deficit. A large percentage of our tax dollars goes towards paying the interest on what we have already borrowed. The majority of the federal budget deficit is being financed by money borrowed from Asian companies such as China. My knowledge about economics is somewhat limited, but my non-expert understanding is that in a strange sort of way the federal budget deficit helps make the trade deficit possible. Money needs to circulate between the two counties for trade to occur so China needs to send the dollars they they accumlate back here, somehow, to keep the price of the dollar from totally collapsing. So they buy T-bills from the U.S. Treasury to help us finance our deficit and the war in Iraq. That keeps the value of the dollar high enough for us to be able to buy goods from China at Wallmart and elsewhere. Correct me if my understanding of the economics is wrong, but doesn't the huge federal budget deficit help to make the huge trade deficit and loss of American jobs possible.
There are other problems as well such as a possible housing bubble in which many people have purchased homes with zero-interest loans or no down payments. If there is a bubble and it collapses then many of them could be in serious trouble. There is also high consumer debt levels and GM and Ford also seem to be in trouble.
So apparently, the overpriced health care that most of us can barely afford is now one of the main engines of the U.S. economy. There is that and housing (at least for the moment). The U.S. still dominates in making music and movies which Hollywood has been trying to protect with all the DRM and RIAA stuff they have been trying to push on all of us and the rest of the world. So the $500 per month that I pay for medical insurance is apparently going to support one of the few growing industries that the U.S. has heft.
Oh and lets not forget that all the baby boomers will soon be retiring and demanding Social Security and Medicare payments. Baby boomers have had smaller families which means that each retired baby boomer will eventually be supported by only two tax-payers. Younger people can plan on doing that while paying off the federal deficit at the same time while working in a job market in which in which many of the best jobs have gone overseas. Am I wrong in thinking that all this is not a sustainable plan for a long term healthy economy? Would someone please explain to me why politicians, the press and voters have not been more concerned about decades of large scale deficit spending. The combination of the war in Iraq and the tax cuts have made the deficit spending worse than ever. It is almost like we are trying to burn ourselves out econonomically. Would someone who has more knowledge about macro-economics please explain why I should not be worried about any of this! It everything really OK?
Re:But healthcare doesn't make value..... (Score:5, Interesting)
That's not true.
A strong economy can be had with trade if the two nations have comparative advantage in trade. [wikipedia.org]
In real life there's rare examples of it existing only between two countries (usually more are involved), but it is an essential concept given that 28% of the global GDP was from exports. [hofstra.edu]
Restricting trade between countries (so there are no imports/exports) would only affect pricing/availability of goods within a country. For example, if you were unfortunate enough to live in a country without a rich oil supply, then all sorts of products that are created from that supply would either be extremely expensive or non-existant (plastics, fuel, etc).
And even if you were to restrice trade to "free trade partners" (as you reference), that doesn't guarantee that the trade won't negatively affect an economy either. Free trade only refers to allowing products to flow without tariffs; it doesn't stop one country from dumping products into another, thus artificially lowering the price of those goods to drive the foreign industry into the ground.
Re:Who pays the bills? (Score:3, Interesting)
A huge problem in healthcare is that the decision to pay is largely seperated from the decision to use services. This is true wether it's an insurance company you're dealing with, or a government payer.
When you go see a doctor for any old cold, bruise, cracked rib, or any number of certain things, the doc is gonna tell you the same thing your grandma would have: you just have to suffer through it. Since those on insurance or socialized healthcare don't have to pay the doctor much if anything, they don't weigh their appraisal of the injury against the doctor's price of services.
They just use the services. However, when you do this, you increase the demand for a doctor's service, and like any industry, this leads to an increase in price.
Healthcare is not a right, it's an industry, subject to the same laws of supply (but not demand, as i've explained) as any other.
To provide healthcare, you need:
1. Highly educated people at all levels
2. Constant research into new methods and devices
3. A manufacturing arm that requires raw materials, production and distribution.
4. Expensive endpoints to deliver services and goods to the consumer.
If you take those four points abstracted, that describes a great many industries. Healthcare is just another industry, and the emotional attachment to good health is the only thing that makes it seem different.
Emotions do not change the laws of supply and demand.
My solution? Well, if I was self-employed, I'd go with a catastrophic health insurance plan- one were the yearly deductable is a hard $3000-5000. Until I reach that limit, I would pay everything. Over it, insurance pays. I'd just have to be sure to have enough saved money on hand to cover the deductable. Such a plan (if widely participated in) is likely to be much cheaper than the standard ones you see around.
Oh, and another thing about insurance: Any successful health insurance plan depends on the participation & payment of young single men to stay afloat. We don't use services unless we have to, for the most part, and hence our payments can go to larger consumers of healthcare- ie men with children, women, etc. (Don't call what's true sexist, btw.)
Re:Time For All the Baby-Boomers to Stand Up! (Score:2, Interesting)
Re:But healthcare doesn't make value..... (Score:2, Interesting)
Nothing has been made because Aunty Tilly got a massage or haircut either. Healthcare is a service industry, and if selling services is a valid business model, then healthcare is a valid business model.
Healthcare doesn't build value, it preserves value. Healthcare is one of the best investiments in workers. If you have ailing workers, their productivity is lowered by far. Do you work as well when you're running a high fever? Or does it take you longer to do less? Aunt Tilly's $20,000 bypass saved her life. If Aunt Tilly's $20,000 bypass allows her to continue in specialized, highly-skilled labor, it's by far the economically correct choice to give it to her. Maybe that $20 K could have been spent on cars or toys or gadgets, but if that money keeps a productive worker producing, it's not a bad usage of money (and in fact is a very good usage of money). Think of it as maintanence on our machines. Maybe getting your car serviced doesn't produce any tangible good, but it sure saves a lot down the road when your car functions in 5 years instead of just dying on the highway.
Re:What keeps US economy running (Score:4, Interesting)
In the USA, two factors most heavily affect the continued subsidization of agriculture: Lobbies and the electoral system. Powerful lobbying groups have huge sway over these problems, usually very large corporations who operate under the façade of being the small farmer. Through this, they yield the power of the college-electoral system through those American states with little else but primary industry, and unemployment is a huge electoral issue. Thus, this "farming the mailbox" is steadfast.
Protection from war is an illusion, and known to be. Despite thoughts to the contrary, trade continues during war, especially agricultural trade - for every country lost to trade in foodstuffs, there are ten who want the barriers to exporting food to, e.g., the USA, dropped.
America's biggest currency stabilizer, where currency is economic purchasing power parity, is their own currency. The US dollar replaced gold as the ab initio staple currency after the Bretton Woods system failed, being the most liquid and stable currency available. Because other countries are subject to currency crises (i.e. Argentina, Thailand, etc.), they stock reserves in American dollars (foreign currency reserves).
The US dollar, then, is effectively backed by every other nation-state interested in preserving its currency against crises. Whenever the US dollar gets "cheaper", foreign countries soak it up. Thus, the biggest "export", in terns of preservation of purchasing power parity, is the US dollar's stability. There are arguments about the Euro, but it's still not a proven currency, though it has all the qualities necessary to substitute for the US dollar, and someday it may.
This isn't to say that patents and copyright are irrelevent. While they are a useful export, that contributes to continued economic growth in the USA, and particularly relevant as you say, as the USA has become essentially uncompetitive in most other areas. However, the laurels, as you could say, rest on the US dollar itself.
Where's the market force? Where's technology? (Score:3, Interesting)
My first reaction when I hear about an industry hiring so many people, is "how can I get those people fired so that the industry's product won't be so expensive?"
I don't think I've ever heard of anyone comparison shopping for healthcare here in USA. And now that I think of it, I don't know how I would. It's not like prices are published somewhere, or that I can go get a copy of Consumer Reports that shows who gives the most value.
Insurance is the reason. A lot of people think of insurance as healthcare, rather than "catastophic oops" hedging. If, when you consider going to a clinic or hospital, you're not thinking, "oh shit, how much will this cost?" then you're not going to exert a market force.
If the patient doesn't exert a market force, then the provider will not be subject to market forces.
And every once in a while, some politician runs on a platform of further removing market forces, to make healthcare even more expensive. At least insurance users have a little say over costs, by shopping around for insurance plans (though it's horribly indirect). Politicians get the bright idea of having involuntary taxes pay for healthcare, so that nobody will have any incentive at all to reduce cost. It's not like someone will say, "Well, I don't want to spend as much on healthcare, so I've decided to pay less, and the only way to do that is to pay less income tax, and the way to do that is to have less income. Therefore, I'm leaving IBM to accept McDonald's offer." ;-)
I think if we can remove the indirections and somehow increase the information flow, we could get people to start thinking about cost/value, and create incentive for advancing the tech. I won't be happy until all the doctors and their support staff are unemployed, because we all have medi-droids taking care of us. You don't want a medi-droid? Ok, fine, hire expensive humans. But I sure want one. And if I can't have a robot, then let me hire someone who makes $10k/year, tele-operates from New Delhi, and prescribes 20-year-old no-longer-patented drugs. I might not live as long as you, but while I'm alive, I'll have a lot more beer money. :-)
Re:everyone had a job in the stone age (Score:4, Interesting)
Actually, I do pay taxes in Germany and I have financed such vacations. I have good reason to. My reason is simple. Imagine a poor family in the US finds themselves facing a choice between a $100.000 hospital bill or death of their child.
Do you think they will let the kid die?
The economic model according to which helping the poor is a bad idea (called neoliberal although it is neither new nor liberal), assumes that they will.
Or will use desperate measures that harm the system that forces them to make the decision?
(Examples include defrauding the hospital, trying to raise money through crime - or even suicide, which destroys investments in education that you helped pay.)
US crime and suicide rates firmly prove this to be the case.
This is why the thinking that the poor do not need help is fundamentally flawed. People not served by the system will attack the system and defending/repairing the system is potentially much more expensive I do prefer financing vacations to massive crime rates and exploding prison populations, thank you very much.
Re:Ignoring quality of life issues... (Score:3, Interesting)
I have seen quotes that suggest 80-50 percent of health care costs are spent in the last three months of life 1 [organicanews.com], 2 [stmarys-stlouis.com]. How is that money well spent? Your insistence on fixing your Aunt Tilly is completely selfish and myopic. You successfully ignore the fact that the resources you have spent on Aunt Tilly are resources that could have been spent providing health care to other younger poeple.
How about we make euthanasia a viable option and let healthcare costs incurred before age 60 be covered by the public/insured. After age 60 the public coverage of healthcare expenses can be pro-rated until about age 75-80 when costs are completely covered by the patient. That way, if you want to keep Aunt Tilly around no problem, you pay. But don't expect me to pay and don't you dare expect children and young adults to compromise their medical access for your Aunt.
Re:Ignoring quality of life issues... (Score:2, Interesting)
You're never going to sell that idea with the 'after age 60' part, since people born before 1970 (I think that's the year) have to work until they are 65, and people born after have to work till they are 67. Plus, pro-rating expenses on someone who no longer gets an income (Other than that shitty little retirement check each month) - that's just fucked up.
Hell, why don't we just make it like Logan's Run and kill everyone the night before their 31st birthday?
Re:everyone had a job in the stone age (Score:3, Interesting)
According to rational choice theory (which underlies almost all economic thinking in this day) they should not. The availability of unemployment benefits, medical care etc. means that logically, people shouldn't work. But they do. Germany is an economic force to be reckoned with - and survived disasters like two World War defeats and annexation of part of the country be the Soviet Bloc - even though this "abuse incentive" has been in place since Bismarck's Health Insurance Act of 1883. The idea that unemployment benefits make people stop working is a fallacy that just keep being repeated.