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Blog Post

What's bigger than Texas? Health care.

January 26, 2015

    Dan Diamond, Executive Editor

    Here's a question that we've asked a few times on the Daily Briefing: Where are the jobs?

    Mark Perry, a scholar at AEI, thinks he knows the answer: In Texas.

    Over the weekend, Perry's graphic showing jobs growth in Texas compared to jobs growth in the rest of the nation went viral. I've pasted it below, and you can read his analysis here.

    According to Perry, the graphic is "a pretty impressive story of how job creation in just one state—Texas—is solely responsible for the 1.169 million net increase in total US employment."

    It's a fascinating point, although the graphic is a bit of an illusion, as Derek Thompson writes at The Atlantic. After all, 29 different states have added jobs since the recession began—although "the immense scale of Texas' job creation is hardly illusory," Thompson adds.

    Namely, while 29 states have added jobs since the recession began, "the Lone Star State has added more jobs since December 2007 than the next six states—California, New York, Massachusetts, North Dakota, Louisiana, and Minnesota—combined," Thompson points out.

    But there's been an even bigger job machine in the U.S. economy than Texas: health care.

    (Hopefully, that doesn't surprise any regular readers of this blog.)

    Below, I've charted out how health care employment has grown by nearly 14% since December 2007, and how the rest of the U.S. economy has basically broken even. (It looks a little different from my usual graphs on the jobs numbers because it's intended to match Perry's graphic in style, but also because it includes farm employment.)

    Notably, a good number of those health care jobs—about 250,000—were created in Texas.

    Of course, this matches what we've been writing for a few years: The health care sector grew steadily through the recession, and continues to boom even though the rate of U.S. health care spending growth has slowed. (Aka "slowth.") The sources of job creation within the industry have changed somewhat; most of the recent job growth hasn't been at hospitals, but rather on the home health and outpatient side. 

    Regardless, the fact that the health care sector didn't shed jobs during the nation's worst economic crisis in 80 years is something of a marvel. And as a result, the health care sector hasn't had a down month in any jobs report since July 2003—a staggering run that no other industry can claim.

    Perry concludes his post by arguing that Texas "clearly deserves the title of America’s 'economic miracle state.'" And that may be true. But it also seems clear that for the sake of the U.S. economy, the health care sector's unfettered growth during the recession was a bit of divine intervention, too.

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