Friday, December 3, 2010

The health care lifeboat

Back in spring Ceredwyn and I talked about what economic sectors were likely to do well in America.  If we are correct about a future of steady decline*, most sectors will do badly.  After much discussion during planting and weeding, we concluded that health care was one of the few areas that would grow in terms of jobs and income.

Why?  Simply put, the eldercare sector.  It grows in numbers, thanks to aging Baby Boomers and relatively low numbers of younger folks (like us, and our children).  Most care can't be outsourced or otherwise scaled, so there's a big, deep demand for sheer numbers of workers.  And seniors have potent political power: we see Medicaid slashed before Medicare gets touched, for instance.  The powers of modern science ensure at least a medium-term continuation in longer lifespans.  More folks to care for in all kinds of ways = growth industry.

So this Planet Money story has a small confirmation of our hypothesis. As you see in the chart above, "Health care, the big winner during the downturn, continued to grow this year." Note their explanation, which ties into our hypothesis:
A big chunk of its funding comes from the government; the aging population means more people need more health care; and health-care spending is one of the last things people cut back on in tough times.
This plays a role in our career discussions with the children, yes indeed.

*Actually, we think of decline as rappelling downhill.  The nation arcs from side to side, bouncing up and down, describing local variations on an overall downward curve.

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