« Stocks Heart CPI | Main | Gas at $1.15 a Gallon?. »

According to the latest Business Week, the health-care industry has added 1.7 million jobs since 2001. The rest of the private sector, none.

For years, everyone from politicians on both sides of the aisle to corporate execs to your Aunt Tilly have justifiably bemoaned American health care -- the out-of-control costs, the vast inefficiencies, the lack of access, and the often inexplicable blunders.

But the very real problems with the health-care system mask a simple fact: Without it the nation's labor market would be in a deep coma. Since 2001, 1.7 million new jobs have been added in the health-care sector, which includes related industries such as pharmaceuticals and health insurance. Meanwhile, the number of private-sector jobs outside of health care is no higher than it was five years ago.

This is a good example of an accurate but misleading statistic. Always be wary of the numbers that talk about "all of the increase" coming from this or that. For example, since the beginning of 1999, the entire gain of the S&P 500 has come on just two days. That's true, but it's not the whole story.

You can select crucial dates, then discount certain factors and presto, you've got a scary headline. The key to remember is that this stat talks about net new jobs. Sure, lots of folks were hired as Web developers and laid off six months later. I think I knew most of them. If you want to be even scarier, the U.S. economy destroys millions of jobs every year. But it usually creates even more.

The interesting thing isn't the sluggish job growth, but the fact that corporate profits have climbed so much despite the sluggish job growth. That's productivity. The average worker is doing far more than he or she was five years ago.

Posted by edelfenbein at September 18, 2006 6:19 AM