The good and bad of health-care job growth

As Business Insider’s Joe Weisenthal notices, the health-care industry is playing a huge part in driving down the unemployment rate, with the sector adding 23,000 jobs this month. That’s a total of 315,000 jobs in the past year, meaning one in five new jobs came from the health-care sector. On Twitter, Weisenthal asks, “Why are people down on this sector of the economy again?”

Here’s why: Health-care jobs are a double-edged sword. They are growing, and that’s a good thing when it comes to reducing the unemployment rate. But it can be a bad thing when it comes to reining in national health-care spending, which eats up about 17 percent of our gross domestic product. As health-care spending has grown, the sector hasn’t become more productive: A New England Journal of Medicine article last year actually find a slight decrease in the output of health-care workers over the past two decades. We’re adding more workers, but each health-care worker is doing less work than he or she did 20 years ago.

“Over the past decade, health care has been one of the primary drivers of job growth in the United States,” Bob Kocher and Nikhil Sahni write in that article. “Unfortunately, these jobs have been added in part because the health system has not improved its productivity at the same rates as other sectors.”

More health-care jobs are great for getting people employed. What it’s not so great for is tackling a problem like this one:

And what that graph suggests is that an unproductive sector of our economy is sucking resources away from more productive sectors.