Healthcare makes all the jobs . . . but maybe manufacturing too? Other labor market desiderata

More join the "healthcare is the jobmaker" chorus, but there's more than just 'told you so'

• healthcare jobs replaced all the manufacturing jobs (much to the benefit of women and aides)

• KKR confirms that, yes, healthcare is the money-maker, but there’s more to it than that

• ADP says employee morale is . . . exactly the same, and again, green shoots

• manufacturing, actually on the march?

---

👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. 

---

Healthcare makes all the jobs . . . but maybe manufacturing too?

I’d like to be wrong on this at some point, but there is yet another entry in the ‘turns out that Random Walk was correct—healthcare does, in fact, make all the jobs’ series.

‘The rise of healthcare jobs’ or how healthcare replaced manufacturing in the overall labor market

This time it’s a research paper titled The Rise of Healthcare Jobs.

It’s chock full of interesting observations about, well, the rise of healthcare jobs, and the outsized share healthcare plays in the overall employment picture (which has been a multi-decade trend, albeit much more so, recently).

Among other things:

Healthcare jobs have largely replaced manufacturing jobs (but the benefits have inured primarily to women):¹

Rise of Healthcare Jobs

There are ~5M fewer manufacturing jobs since 2000 and there are ~5M more healthcare jobs, over the same period.²

The paper does test the “manufacturing to meds” hypothesis, i.e. that a higher share of manufacturing jobs would predict a higher share of healthcare jobs, but finds the evidence lacking (with some exceptions). The evidence is more consistent with broader demographic and economic shifts than a deliberate strategy to convert a manufacturing base into a healthcare one.³

The “foreign born” share of healthcare aides specifically grew vary rapidly (and exceeds what the overall share of foreign-born workers would predict):

Aides went from ~7% foreign born to ~24% since 1980 (and this excludes 2023-24, which had very high inflows of “foreign born” workers).

The annual change is about 50% more than what the overall change in the foreign born share would predict. So, perhaps instead of Uncle Sam’s Immigrant Nursing Brigade, we call it Uncle Sam’s Immigrants Aides Brigade?

Perhaps not.

Anyways, I’ve laid out the implications of this more times than I can count or backlink. The tl;dr is that the “strength” of our economy is largely a demographic and deficit-financed rotation to a national nursing home, driven in substantial part by low-wage foreign-born service workers.

It’s not the rosiest picture to begin with, but also, if not healthcare, then what?

It’s a really good question that almost no one was asking, until very recently.

KKR says, “can confirm, healthcare is driving most of the job gains”

I would note, for the sake of completeness, that KKR has joined the party, as well: