BusinessWeek asks the million dollar question: "What’s Really Propping Up The Economy?"
Their answer — not housing, technology, or finance — is health care:
"If you really want to understand what makes the U.S. economy tick these days, don’t go to Silicon Valley, Wall Street, or Washington. Just take a short trip to your local hospital. Park where you don’t block the ambulances, and watch the unending flow of doctors, nurses, technicians, and support personnel. You’ll have a front-row seat at the health-care economy.
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.
Sure, housing has been a bonanza for homebuilders, real estate agents, and mortgage brokers. Together they have added more than 900,000 jobs since 2001. But the pressures of globalization and new technology have wreaked havoc on the rest of the labor market: Factories are still closing, retailers are shrinking, and the finance and insurance sector, outside of real estate lending and health insurers, has generated few additional jobs."
Quite a picture:
The biggest surprise in the column was that Tech hasn’t created all that much in temrs of new jobs:
"Perhaps most surprising, information technology, the great electronic
promise of the 1990s, has turned into one of the biggest job-growth
disappointments of all time. Despite the splashy success of companies
such as Google (GOOG ) and Yahoo! (YHOO ), businesses at the core of
the information economy — software, semiconductors, telecom, and the
whole gamut of Web companies — have lost more than 1.1 million jobs in
the past five years. Those businesses employ fewer Americans today than
they did in 1998, when the Internet frenzy kicked into high gear."
Fascinating stuff . . . worth checking out the full article.
What’s Really Propping Up The Economy
Michael Mandel, Joseph Weber
Business Week, SEPTEMBER 25, 2006 http://www.businessweek.com/magazine/content/06_39/b4002001.htm