Healthcare Job Growth Slows in October
Healthcare created 11,600 jobs in October—a significant drop from the 45,000 jobs created by the sector in September.
However, even with the decline, healthcare remains a leading source of job creation in the overall economy, and was responsible for 15% of the 80,000 new jobs across all sectors in October, new data from the Bureau of Labor Statistics show.
Through the first 10 months of 2011, healthcare created 266,000 jobs—more than the 263,400 healthcare jobs created in all of 2010. Healthcare is on a pace to create 319,000 new jobs by year's end. So far this year, the 266,000 new healthcare jobs represent 22% of the more than 1.2 million non-farm jobs created in 2011.
While the job growth is heartening within the healthcare sector, and it is providing some short-term good news for an otherwise dire job market, some observers say it's not necessary a healthy trend.
"It's probably a bad thing. It's definitely not sustainable for the long term," says healthcare economist Jason Shafrin. "Let's say that healthcare worked perfectly and you could cure someone with one pill that cost $1. That would be a very efficient use of healthcare and people would spend all their money and effort on things that would be more useful."
Healthcare in America is highly inefficient and expensive, however. "It's providing a service that is needed, but it is not so clear that an increase in spending is good," Shafrin says. "It does employ people. But in bad neighborhoods they employ a lot of police, and you would prefer not to have that."
Labor represents about 60% of healthcare costs, and the salaries paid to healthcare workers take money from other areas of the economy. At some point, the demand for new healthcare workers will collide with consumers' inability to pay for care, Shafrin says. "Something will have to happen. The cost pressures are too strong. It's like the housing sector. You can see it growing and growing and growing and eventually there has to be a self-correction."