The one thing driving U.S. job growth

The U.S. added some 130,000 jobs in January. Almost all of those jobs were in just one sector: Health care. Why aren’t jobs growing anywhere else?

Guy Berger, senior advisor on labor markets at Access/Macro. Senior fellow at the Burning Glass Institute. Author of the Substack “MacroMostly.”

Joshua Gottlieb, Economist and professor at the University of Chicago

Sari Gillen, Houston-based healthcare recruiter at Goodwin Recruiting.

Sachin Shivaram, CEO of Wisconsin Aluminum Foundry in Manitowoc, Wisconsin.

The version of our broadcast available at the top of this page and via podcast apps is a condensed version of the full show. You can listen to the full, unedited broadcast here:

Part I        

MEGHNA CHAKRABARTI: The latest U.S. Jobs Report from the Bureau of Labor Statistics is expected tomorrow. The monthly report is a very important snapshot of the economy. As you, America's workers, are literally experiencing it. Which industries in the country are adding new jobs or hiring?

Which ones aren't, and which industries are losing jobs? Tomorrow's report will look back at this past month of February. And when it comes out, I want you to look for something specific. It's actually something that also popped up in the January jobs report. That month, the U.S. added roughly 130,000 jobs, but nearly all of those new jobs, almost all of them were in just one industry.

Take a guess as to what it is. Did you guess health care? Because if you did, you're exactly right. In other words, if you removed the health care industry from the January jobs report, the American economy would've added basically zero new private sector jobs in the first month of 2026. So what does that mean and why does it matter?

Guy Berger joins us now. He's a senior advisor on labor markets at Access/Macro and a senior fellow at the Burning Glass Institute. He also writes the Substack MacroMostly. Guy, welcome to On Point.

GUY BERGER: Thank you, Meghna. I'm glad to be here.

CHAKRABARTI: Okay. You know what, before we dive into the health care part, I'd love if you could set a foundation for us.

This 130,000 jobs number from January. Put it in context in comparison to reports, say, post COVID, right? Because COVID was such a turning point for the economy. How does that 130,000 compare?

BERGER: I think that one thing that's changed in the last few years is we have to adjust our views of what a good number is.

When we were coming out of COVID, we were adding hundreds and hundreds of thousands of jobs. There were even some parts with millions of jobs added because we were just putting people back to work. Then in '22, '23, we had this big immigration wave and we were putting lots of new arrivals to work.

And now with the immigration crackdown the U.S. population, working age population's barely growing. If at all, 130,000 jobs, which would've been very unimpressive a few years ago, is actually a good number. Perhaps even a very good number. Because the working age population is barely growing.

130,000 jobs, which would've been very unimpressive a few years ago, is actually a good number. ... Because the working age population is barely growing.

Guy Berger

CHAKRABARTI: Okay. This, I love working on this show because every time guests say something I'm like, oh wait, I want to know more about that. And it derails us a little bit, but it's worth it. Take us more deeply into the, okay, speculate with me. If there weren't an immigration crackdown going on right now, would you think that the working age population in this country would actually be growing more than it is?

Because you said it's barely growing now.

BERGER:  Yeah, it would definitely be growing. A lot of the immigrants that came to this country in '22, '23 are people of working age generally, probably younger than the median American that's living here. And it took them a while in some cases, but they found jobs and now all of a sudden, we're just not adding.

And so economists call this idea of the break-even employment growth rate, the rate at which how many jobs we have to add each month just to keep the unemployment rate steady and that's way lower than it was in the past. A lot of economists think that it's possible in the next few years that might even become negative, that we will be able to lose a little bit of jobs each month and still have the labor market not get any worse, which is wild.

It's a strange thing to think about, not something that we're used to thinking.

CHAKRABARTI: Yeah, tell me about it. I'm having trouble actually, honestly, I'm having a little trouble wrapping my head around it. Because when you think, okay, we're keeping unemployment low, this is supposed, this is a good thing, right?

You always need a little bit of unemployment for people moving around between jobs. We don't want a high number, which we've got a pretty decent number now, four-ish percent if I recall. So on the one hand, that's a good thing, but you're saying that part of that low number is simply because there aren't as many or we flatlined on the number of working age Americans in this country. Which doesn't sound like a good thing.

BERGER: No, and I think there are lots of ways to think about the labor market. I don't think that, there are a lot of reasons why you wouldn't want the working age population in the United States to flatline or even at some point shrink if the population keeps aging and we don't have a lot of kids.

And we don't have immigration. So I think there are ways to think that it's not good. The only thing it means though, from the perspective of is labor market heating up or is it warming up? Which is one way, not the only important way to think about it is we just don't at this point, we're not quiet at the point where the job market can hold steady with negative job growth. But we're at a point where maybe low job, what we would've considered very low job growth in the month is in the past is okay. And so a number like 130,000, which you know, back when I started 20 years ago in this career would've been very meh numbers, now, suddenly, wow. What a great report.

CHAKRABARTI: Okay. It's all relative, isn't it? The frame of reference really matters.

But if we're not adding more jobs though, putting the working age population aside, should we be able to, on average, be able to read the number of added jobs in the economy as basically this is the demand amongst employers for new workers, because they need workers to fill those jobs. They actually are growing and they're hiring more. That's a basic understanding that I have of the jobs report.

BERGER: That's basically it with a catch that I think in times when we had faster population growth, this kind of number might not have been enough to keep up with the supply of labor that's increasing and that part's flipped in the sense that if, I don't, actually, don't think we're going to get numbers as good as January is for the rest of the year, but if we do.

It's going to be a case where labor demand is growing faster than labor supply in January. That seemed to be the case. I don't necessarily think that's going to continue for the rest of the year, but that's what it looks like.

CHAKRABARTI: Okay. Overall, I get your point about this is better than it has been in the past, and it's better considering the sort of population dynamics that we're talking about right now, but it still feels weird.

Like it doesn't seem like we're in normal times regarding how to understand the labor market.

BERGER: No, it's very weird and I think just that I don't want to pay an overly polled thing. We're talking about January over the past year. Weak job growth? Yes. Some of it is just the population's growing more slowly, but the unemployment rate went up overall in the past year.

So it wasn't enough to quite keep up. And I think just generally setting aside January's report and December's report, I think I've characterized as good, the labor market's gradually been drifting in a weaker direction. And I think there's hopes that 2026 will be the year of late market reacceleration.

We get more good jobs report. I'm certainly crossing my fingers for it. But it would certainly be a break in trend. For things to really move in the right direction.

CHAKRABARTI: Okay. So interesting. Slightly disturbing, but so interesting, Guy.

BERGER: Yeah. Okay. It could be worse.

CHAKRABARTI: So tell me how, no, this is actually important to keep us in a normative mental state here. What's a potentially could be worse scenario?

BERGER: The R word, recession. I think that if you look at the past year, the past few years, we've had this labor market that's been cooling very gradually.

If you think about a pot of boiling water. Maybe the ... market in '22, '23. It's been cooling very gradually, but nobody, if you're thinking of a recession, suddenly that pot, like freezing over unemployment, spiking, that just hasn't happened. Unemployment's just going up very slowly.

Some parts of labor market are worse. If you think about people that are looking for a job, they're having a really tough time. But people that have jobs already, their environment still, despite all the somewhat scary cherry-picked anecdotes, still relatively low layoffs. For them it's okay.

And so I think it's a job market that just, again, has it been heading in the right direction the last few years? Definitely not, but it's doing it very slowly. Whereas in a recession, what happens is the opposite, is suddenly we found ourselves one month in a good labor market and then a few months later in a very bad one.

And so far that has not happened, and we're lucky that it has not happened.

CHAKRABARTI: Okay. So let's get to health care now.  I borrowed some language from a lot of headlines that came out after the January jobs report that said if you take health care out of the picture, there were basically no new private sector jobs or a de minimis number of private sector jobs added in January.

Give us your take on that. Is that just one of those screaming get your attention media headlines or is there really 'there' there.

BERGER: I mean, first thing, it's true in an accounting sense. That's the count in January, if you look at the past year it's even more stark.

I just did a quick calculation, and it was more than all the jobs that were added in the past year, is it outside of health care, it was negative. And the reason, and I think the question becomes, we said in an accounting sense, is this something to worry about?

And I guess my answer is, why should we worry about it? This is what we collectively, as society, as an economy are choosing to spend our resources on, is health care. Our population is aging, people want spend money on that and there's nothing inherently wrong with that. That's just what we're shifting resources to do.

What it does mean is that other sectors, for a variety of reasons, are not able to attract as much labor as they did because health care is absorbing so much of it. But I'm not worried in the sense of what happens if health care suddenly vanishes? It's not going anywhere. The big forces causing to expand that have caused it, I think roughly at 15% of employment is now, non-farm employment is in health care and social assistance. I was looking at 25 years ago; it was about 10%. It's just this long running trend. And will probably continue. I mean going to have even more health care jobs to share total employment in 25 years than we have now.

CHAKRABARTI: So I actually, that's what we're going to talk about later in the show. So in terms of maybe this just matches how we're spending our money. One in $5 in the United States goes to health care. So I will get to that. But I do want to actually just be very as precise as possible. Because I started with the attention-grabbing headline, but I want to be exact and factual. About what's actually in the jobs report. The 130,000 additional jobs in January. I'm looking at the BLS report right now.

It says health care added 82,000 jobs and then social assistance in 42,000 jobs. So that gives us 124,000 right there. And then it's actually says, construction added a couple of 10,000, so that's what we're talking about here, and go ahead. Tell me a little bit more about what you see there.

BERGER: Yeah, you have this economy of other, first, the general picture overall over the past year again is this very gradual cooling.

We're not quite keeping up, leaving, setting up January which was good. Like we're not quite adding enough jobs to keep up with even the meager pace of the labor supply growth that we have. But even like the fact that other sectors are not adding, like health care's just absorbing that.

Yeah. It's like this only, I almost compare it to this big star that's exerting a lot of gravity and resources that in this case, let's call it resources, human beings who would've gone to work in other sectors are going to that sector. And if those sectors are not doing great. It's less of a problem because these workers so far have somewhere to go. In terms of health care adding jobs.

Part II

CHAKRABARTI: We're talking about very interesting thing in the January jobs report. Tomorrow the February jobs report comes out, but January actually continued this kind of somewhat hidden trend, hidden for those of us who don't obsess over BLS statistics.

This trend of health care employment far exceeding employment in other fields. So for example, if you look at the jobs report, you can just go to the bls.gov and find it from January. That 130,000 jobs, non-farm payroll jobs in January added, social assistance jobs increased by 42,000 in January.

Construction added 33,000 jobs in January, and then there's health care added 82,000 jobs in January. Actually, before we go any further, Guy, for those On Point nerds amongst us who will go to the BLS website and look at this report. Many of them may be asking, how does 82,000, 42,000 and 33,000 sum to 130,000?

Because it does not. Can you make sense of that?

BERGER: There are a lot of industries in the U.S. economy. I mean, it's funny we're talking, and I think that's part why some people do not, may worry about this narrowness of gains, is you have all these other retail, professional services, financial activities, utilities, mining, manufacturing, and those, the fact that those numbers that you mentioned add up to more than 130,000 pretty clearly indicates that the other industries are all collectively slightly negative.

And again. Is this a problem? I don't think so, but I do think it's worth recognizing that, like essentially in terms of employment, these other industries are shrinking, or employing fewer people than they did back in December.

CHAKRABARTI: Thank you for explaining that.

So that non-farm payroll employment, monthly number is a net number. Key thing.

BERGER: Yep. Okay. Across all these industries.

CHAKRABARTI: Gotcha. I see here that they say the federal government employment, no surprise there since the slashing that's been going on, down by 34,000. Financial services, 22,000 job reduction in January. Okay. This is making a lot of sense. So let's go back now to health care. We spoke with Sari Gillen, a Houston based healthcare recruiter at Goodwin Recruiting, and she says it's a great time to be a nurse, or basically any kind of health care worker looking for a job.

SARI GILLEN: If they're on LinkedIn especially, the nurses are likely receiving at least three to five offers per week.

Sometimes my biggest challenge is waking up my clients to that fact. Because when I get someone on the phone, when I get someone in front of me, I have to complete that process right there.

CHAKRABARTI: And if she doesn't hire that person on the spot, Gillen says someone else will come right in behind her with a competing offer.

GILLEN: Most of my health care clients now, as soon as they post one job with me before I even provide them candidates adequately to fill that role, they're already opening up multiple roles. The average number of roles I have open per client now is seven. They're opening up new centers. They are scaling their clinics.

I also have acute care providers, hospitals. They are competing in the same market for the same licensed clinicians. They're having to up their game with sign-on bonuses and reload bonuses.

CHAKRABARTI: Gillen says some of the big growth areas are in small to mid-size clinics and ambulatory surgical centers.

GILLEN: People are much more comfortable seeking health care outside of an acute care space.

They're much more trusting of their urgent care centers and outpatient surgery. Nurse practitioners are able to completely run a practice and prescribe with offsite medical director in the form of an MD, so that's in high demand as well.

CHAKRABARTI: The health care industry has so far as we've been talking about, been very recession proof when it comes to jobs, Gillen says, and clearly she hopes it stays that way.

GILLEN: As long as we don't have a standardized health care program in this country that is provided by our government, the market is going to be competitive in that way. We have the baby boom generation that is turning 65 and over, entering into the Medicare/Medicaid market.

We haven't figured out how to not age and become ill and pass away. You do have a nursing shortage now. And as long as that's going on, you've got a smaller pool to pick from. So it's intensely competitive. That's not going to change unless the growth continues to be seen from the employment sector that will drive the return of a flush of clinicians into the market.

That's only good news for us, especially as I get older. I want to make sure there's adequate health care for me when I'm ready for it.

CHAKRABARTI: Sari Gillen is a Houston-based health care recruiter at Goodwin Recruiting. Guy, I want to bring in another guest into the conversation here in just a second, but before I do, I fail to ask again, in the attempt to clarify the statistics that come out of the federal government when we're talking about health care jobs.

Health care is such a giant sector. Does it mean everything from obviously nurses to, I don't know, a pharmaceutical company administrator or researcher, or is it narrower than that?

BERGER: So it's both narrower and wider. I would say wider in the sense that if you think about health care provider, like this isn't just nurses and doctors.

This is accountants, lawyers, janitors in these facilities. So like it's basically a huge range of occupations. We talk about health care, it's that whole behemoth of whoever works at a health care company whether big or small is that, I say it's narrower in the sense that, for example, pharmaceuticals are likely, a lot of 'em are likely to be in the manufacturing sector.

Some that may be in, if they're working in a retailer that specializes in pharmaceuticals or in a wholesaler that specialize, that's another industry entirely. And I think to some extent, those are smaller chunks of the broader health care market than what is identified as healthcare in the BLS report.

But they're there and they're probably also growing. And even if those aggregate sectors, like for example, manufacturing are losing jobs, it's still possible that segments that have to do with production of pharmaceuticals may be doing better. It depends.

CHAKRABARTI: Okay, gotcha. So basically though, what we're talking about are the jobs associated with either facilities or businesses that are fairly close to patient facing.

BERGER: Yeah. Providing healthcare services.

CHAKRABARTI: providing the services. Got it. Okay. Guy, hang on here for just a second because now I want to turn to Joshua Gottlieb. He's an economist and professor at the University of Chicago. Professor Gottlieb, welcome to On Point.

JOSHUA GOTTLIEB: Great to talk to you. Thanks for having me on.

CHAKRABARTI: Okay. So even though I've been focusing on these January numbers, January 2026, the truth is that the growth of jobs in the health care sector as outpacing most other industries has been going on for, what, 40 years?

GOTTLIEB: Longer than that. It's been going on, my research starts back in 1980. But Medicare started in 1965, '66, and that really spurred a lot of the growth and demand for health care.

CHAKRABARTI: Okay. So tell me more. What's going on and what kind of trends are you seeing in terms of the increased the growth of jobs in this sector?

GOTTLIEB: So over the past six, seven decades, we've seen a trend that looks a lot like what we've talked about over the past year and the past months but over a longer time horizon.

So we've seen growth in health care employment about three times the growth rate of non-health care employment over that period. So non-health care employment increased by about 60%. Health care employment more than doubled. These jobs are also turning out to be pretty good jobs. So we've seen wages increase at the same time as employment has increased.

This aligns well with what your recruiter was talking about. There's a lot of demand; there's a lot of technological progress that requires workers. There's an aging population and we subsidize that demand through our public policies. So this leads to a lot of demand for health care employment. And given how hard it is to train health care workers, their wages are going up at the same time as their employment numbers are.

CHAKRABARTI: Okay. I'd like you to just talk a little bit more about subsidizing that demand through our health care policies. What do you mean?

GOTTLIEB: The key thing that, and this gets back to the question of are these jobs creating value? How good is this for the economy in a normative sense? If we see somebody buy a car.

We assume that they value that car at more than the cost of making that car, otherwise they wouldn't have bought it. Same thing for a house or pretty much anything you buy on your own, but that's not necessarily true in health care. A lot of health care is provided through government programs.

So the taxpayers are subsidizing it or paying for it entirely. Even when you buy it through private insurance. We have policies such as excluding health insurance premiums from income tax, which make it attractive to make health insurance more generous than people might otherwise choose to purchase on their own.

So all of these subsidies mean that people don't fully, or don't even at all, think about the cost of their products, the cost of their health care. So that means there's demand, regardless of the value being added. Now, I don't want to say that there's not value added. There's tremendous value, there's tremendous innovation and lifesaving and life improving care that takes place.

But it is a little bit harder to go back and say, is all of it creating value that is valued by the consumers?

CHAKRABARTI: Actually, I invite both of you to be really brutally honest about this question of value. Because it can be evaluated in so many, from so many different angles. One that comes up to me is how much value is the health care system adding?

If you look at health outcomes in the United States versus health outcomes in peer nations that are actually spending less on their healthcare. Our system isn't actually adding overall net positive health value, right? We were more chronically ill. Our life expectancy as Americans now does not match those of peer countries.

And yet we continue to spend more and more money. I think it's okay to say we should question how much value, down to the level of individual health care, but then also more broadly across the entire economy is this gargantuan sector actually bringing to the country, Professor Gottlieb?

GOTTLIEB: I think it's a little bit hard to make that comparison.

When the populations are so different and the underlying health behaviors and risks are so different. So a lot of the life expectancy difference is because of external causes of mortality. We don't see the same rates of car crashes and gun violence and other external causes in other countries.

That's not the healthcare system's fault. We also give the health care system an unhealthy population. Which means that it's got a harder job to do. So I don't think you can just look at the life expectancy and conclude that it's not adding value, but I think it's a fair question to ask.

I just think it's a little bit too glib of an answer. And we don't really have a good answer.

CHAKRABARTI: So I wasn't just looking exclusively at life expectancy, I was also thinking about chronic disease. Just to be clear on that.

But I do take your larger point. But Guy Berger, let me go back to you because Professor Gottlieb also brought up something interesting and actually quite important, and that is not just exclusively how our health care system is funded, but what the incentives are, right? Because we have so many forms of subsidy for covering the cost of health care.

Obviously, Medicare, Medicaid, big one. And then even tax incentives for employers, et cetera. Then there's also the fact that the way our system is built, there's also a lot of incentive to provide more and more high-cost care, right? Because there's a profit motive in many parts of the U.S. health care system.

All of this leads to more spending, which then leads to, it can be a factor or a force in the job growth as well. The money is there, Guy, is that a fair analysis?

BERGER: Yeah, I think that's fair and I think it raised the question of, if we structured it differently, would there be fewer jobs in health care and more jobs elsewhere?

Would the jobs in health care be different? I talked a little bit about how the structure of this industry and for example, how there's a lot of administrative. And lots of other workers. Would there be fewer administrative workers and fewer accountants and fewer lawyers and more health care providers?

Would there be more technicians because the sector would become more capital intensive? We can go all sorts of ways in this. It does raise the question of what would a world with a different incentive structure for health care, spending the money on something else or in different parts of health care would look like.

And I think it's a really good question. We don't know, like there's nothing inherently suggest, we like people to be employed. But there's nothing inherently like much better about these jobs, like intrinsically better about health care jobs and jobs in manufacturing or retail or professional services or financial services.

CHAKRABARTI: I guess, and Professor Gottlieb, I'll turn this to you, intuitively, not that's a good way to make decisions at all, but intuitively, I start getting concerned when things get so lopsided. And I wonder again to just check my own analysis here, in terms of job growth in the health care field.

We're talking about how it's been very intense in this country for more than 40 years. Do we see a similar pattern in other peer nations?

GOTTLIEB: We do see a similar growth at lots of countries. Even with spending levels much below the level in the United States are worrying about their own health spending.

And so I think that some of it comes from the common trends of population aging across the world, certainly across developed countries. If we go back to the question about who are the health care workers and where are they, there's a few other really key points. The first is, although there is a lot of concern about administrative workers, we see faster growth in the clinical workers than in the non-clinical workers.

Physicians, nurses, aides are growing faster than the nonclinical staff. The really explosive growth in the past decade or two has been mid-levels. So this is nurse practitioners, physician assistants, nurse anesthetists, people who are doing work that formerly would've been done by physicians, but because of the restrictions on physician training the market has had to adapt, has had to find ways of getting the work done by people who can be trained faster and without so many restrictions as physician training. So from 2010 to 2022, we saw more than doubling of the number of mid-levels or advanced practice practitioners, they're also called.

While the number of physicians grew by about 11%.

CHAKRABARTI: And so once again, this is just, to me this is a natural response in terms of the demands placed on the health care industry by all the factors we've been talking about.

GOTTLIEB: Yeah, economists love to talk about demand and supply, so I'll put the two together here.

We have the demand forces that you just mentioned, the subsidies, the population aging, all the reasons that people need health care, and we need workers to provide that health care. But there are key supply restrictions on physicians in particular. It just takes a long time to train physicians. For a long time, no new medical schools were being allowed, were being approved, and so the market saw, As Guy said earlier, and you said the market is responding to incentives, right? The demand is there, the patients are there, the money is there. You need the workers, and if you can't get physicians, you're going to find someone else to do it.

So technology changes and the type of worker that you use changes.

Part III

CHAKRABARTI: Now, just to recap what we've been discussing, that January jobs report showed 130,000 net new jobs added to the economy in January. Pretty decent number given how all over the place the labor market has been.

But this is why we like tinkering under the hood at On Point. Because if you look more closely, that 130,000 number is basically driven by the health care industry. All the growth, or at least the most important aspects of the growth in jobs has been happening in health care. Great. We spend $1 in $5 in the United States on health care.

It makes a lot of sense. But what it also means, and here I'm reading from the Bureau of Labor Statistics January report. It means that mining, quarrying, oil and gas extraction, manufacturing, the whole manufacturing industry, wholesale trade, retail, transportation, information, professional and business services, leisure and hospitality, and other services, basically the entire rest of the economy did not add jobs net. And therein lies the problem.

So we wanted to see what that looks like on the ground. And to do that, we turn to Sachin Shivaram. He says he has slowed down on hiring recently. He's the CEO of a company called Wisconsin Aluminum Boundary, which primarily makes aluminum castings or custom aluminum pieces for things like medical equipment and truck parts.

SACHIN SHIVARAM: Probably the types of jobs that people imagine when they think about heavy manufacturing, a lot of hard physical work. We've got hot molten metal. We're pouring it into molds. We run pretty much 24 hours a day.

CHAKRABARTI: Shivaram says the past two years have been what he calls an industrial slum.

SHIVARAM: There's rising interest rates, the post pandemic whiplash, and then of course the tariffs. The tariffs really spooked everybody. I believe that if the president, if he imagines who he's trying to help in terms of what the tariffs, he's gotta think of someone like us, blue collar work, Midwestern, metals intensive.

And I can tell you that the tariffs have not helped our demand.

CHAKRABARTI: In fact, Shivaram says his company buys the aluminum for its castings from overseas. With tariffs, the price of that aluminum has shot up. Shivaram had to raise his prices for his own products, and now some of his clients cannot afford to buy his castings.

Wisconsin Aluminum Foundry is headquartered in Manitowoc, Wisconsin, and Shivaram also has locations across Michigan, Indiana, Iowa, and Minnesota. Last year he had to lay off 50 workers at the Indiana plant. That plant primarily supplies parts to the auto industry.

SHIVARAM: In Indiana, things are still very slow.

We're not hiring anybody there. In our Wisconsin plant, we have some customers in some end markets that are growing. We'll probably end up hiring about 50 people. In Iowa there we've won some new customer contracts actually, because one of our competitors is going bankrupt. So that's not necessarily a net economic gain for the country, but for us it is.

So there we're hiring about another 30 people. Our other plants are status quo. We're not really hiring there.

CHAKRABARTI: So we asked Shivaram, what would it take for him to feel confident about jobs?

SHIVARAM: We're going to hire when we have demand. Our customers are telling us, Hey, things are looking good.

We're going to bring this part back, or we're going to have increased demand for this part. And so on our end, we're like, okay, got it. We're going to gear up for that. What would cause us to invest would be more clear pathway for the next few years, which has been a long time since we've had that sort of certainty.

CHAKRABARTI: Shivaram also acknowledges his company's been investing in automation, replacing some human workers with robots.

SHIVARAM: Unfortunately, human labor is getting too expensive for what we can sell our products for, and so in our plant in Manitowoc, Wisconsin, I believe at one point we used to employ 900 people. Today, we can do probably 20 times the amount of work with 300 people.

So as we grow, I hope to add people, but the rate of adding people will be less per additional unit of growth.

CHAKRABARTI: So that's Sachin Shivaram. He's CEO of Wisconsin Aluminum Foundry. Guy Berger. I'm curious to hear from you what you heard in that story from Wisconsin.

BERGER: Shivaram covered a lot of the headwinds that are affecting the U.S. economy and they're hitting manufacturing most directly, but I think they're hitting the economy overall. And that's part of the reason that, in the past year, yes, health care has added a lot of jobs, but the unemployment went up.

Policy has been slowing the labor market and causing labor market distress I guess if you think about unemployment as one barometer of that to go up a little bit. And again, manufacturing is a ground zero and health care is doing better, adding a lot of jobs. But just generally in the aggregate, this is not a great time.

The U.S. lay market, January's report and December's report aside, is not on a great trajectory.

CHAKRABARTI: Yeah, that's what I'm wondering. Because it's all well and good for health care to grow, but you don't want to have an economy that is so lopsided in where it's growing. This last report showed no growth anywhere else.

Overall, that cannot be healthy, let alone for U.S. workers who don't wanna work in health care. But for the economy as a whole, you want vibrancy across sectors, Guy.

BERGER: You do. I think if, for example, if in general the market was a little stronger, I'd be less worried about it because I'd say, you know what, like health, the demand's keeping up with supply and things are going to health care.

I think the problem is health care as it is, adding a lot, is not, in January aside, but over the past year has not been quite strong enough to overcome weakness in other sectors. And I think in that respect, yeah, like I would certainly want at least some other sector, either health care to get stronger to do that or other sectors to pick up more of the slack.

CHAKRABARTI: Yeah. And we're talking about strength in the aggregate, right? Because --

BERGER: Yes, exactly. Some sectors. There's a second question, like what sectors should be in the United States? And I think there's like, I'm sure Professor Gottlieb has done a lot of analysis on how optimal, for example, government spending is, et cetera.

I think we can debate what actually exists, but that inherently doesn't alarm me as much. The joke is that sometimes people joke that the United States is a giant health insurance company with an army. And maybe what we're turning into is there's a health insurance, giant health insurance, and it funds a giant health care industry that employs just an ever-growing chunk of Americans.

I don't know, but it doesn't, that doesn't inherently like agitate me. Maybe the future of this country has just a lot of health care workers and fewer manufacturers and miners.

CHAKRABARTI: That doesn't agitate you. Interesting. I feel a little differently. It agitates me. It does. Again, just because I just think, diversity in industries is a good thing.

But I'm going to turn back to the people with the actual data and analysis, which is you, both of you. But Professor Gottlieb, can you tell me, when you look back in this kind of half century of health care sector growth that you've been examining. Have we been through periods before where almost all the job growth has been in the health care sector?

Because I know that it's been outpacing other industries for a while, but has it been so radically lopsided in the past, as we saw it in the January report?

GOTTLIEB: With one exception, which we can come back to. Health care job growth has been steady, just ever trending upwards. So that means even when there has been a recession, if I'm allowed to use the R word, meaning overall employment growth is negative.

Health care job growth has, other than the one exception at the beginning of COVID, has continued upwards. So yeah, that means that there has been positive growth in health care while the rest of the economy has been negative. The other important divergence we've seen between health care growth and other employment in other areas of the economy is geographic.

So the job losses that we've seen in the Rust Belt and formerly dominant manufacturing towns have not systematically been replaced by health care jobs in those same places. So I think that's a big part of the reason for the concern, is we're seeing health care growth everywhere, but we're not seeing more of it in the places that have lost more manufacturing jobs.

At least not especially.

CHAKRABARTI: So I'd like to talk more about this. No go ahead. Did you want to add more?

GOTTLIEB: No, go ahead. I'll follow up.

CHAKRABARTI: No, because I appreciate you pointing this out because it gets down to why, what jobs are available where really matters. And also, I'm not sure it's realistic or even fair to expect that people who cannot get jobs in manufacturing, like you said, say in rural America, where those jobs have not come back yet in any meaningful way that they can all turn to finding health care jobs. It's just not realistic.

GOTTLIEB: Think about the timeframe we're talking about here, right? I'm talking about changes since 1980.

So that's 46 years, right? Half century as you say, that's not really about the specific people losing their jobs, needing to transition. As came up earlier, it's not that we're seeing mass layoffs, right? It's really about where do the new entrants need to go. Another way to look at this is to look at the sex composition of these jobs, right?

So the manufacturing job losses, not surprisingly, are overwhelmingly male. While the health care jobs are overwhelmingly female. So that's another big reason that we're seeing tension and disconnect around this. The jobs that a man could have expected to have in 1980 are not being replaced by men getting those same jobs in 2026.

The jobs that a man could have expected to have in 1980 are not being replaced by men getting those same jobs in 2026.

Joshua Gottlieb

The health care jobs are disproportionately being filled by women. So I think this is an important question is, What are men supposed to do? And how do we help men as a group adapt? It's not about retraining one person, it's about saying, Hey, men can be nurses too.

CHAKRABARTI: Yeah. No, this is exactly why I'm so glad we're able to have this conversation.

Because there are so many layers of nuance here that are actually having an impact on people's lives right now. I take your point that we're talking about sort of macro trends and why those are important, but I'm also just personally interested in individuals today who are floundering in the job market, if they're not looking for a health care job.

Guy, let me ask you something about the potential domino effect here. You can call me crazy if you want. People have called me much worse in the past. Speaking of these new entrants into the job market, if they're getting the message right now that if you want a job, you got to go into health care, is there a potential sort of longer term negative feedback loop that we have a lot of talent going towards health care that actually may have wanted to go in another direction, making growth in those other sectors even tougher in the long run.

BERGER: Yeah, it's something you worry about for sure, that ... the market, especially because a lot of these jobs do require substantial training. People going, a lot of them require at least an associate's degree, and in many cases, a lot more than that. And suddenly you have this big shift of young people that acquire that training, create a glut in that sector, while simultaneously causing shortages of talent in other sectors.

It's happened before. A lot of the talk right now about the stress and the software among software engineers because some people jumped into tech when that sector was booming. And I think that is definitely a risk. And it's a hard one to solve because people are wondering, what should I do?

I need to make, get a job once I finish school and you want to go someplace where's safe. And like it's a hard, there's no easy way to coordinate that. So yeah, we could totally have this kind of bullet effect. Where we shift from shortage of talent in nurses to a glut, and then all of a sudden, we're telling people don't go into nursing, go into working in the aluminum casing factory.

Yeah, I think that is something to worry about for sure. And there's no easy solution for it as far as I can tell.

CHAKRABARTI: Yeah. I don't like to ask questions where there's easy solutions, but we've just got a couple minutes left here and Professor Gottlieb, I'd like to turn back to how you got started when you first came on about the underlying drivers of the growth of the health care industry in this country. That being that it is a very highly subsidized, government subsidized industry. We have been seeing some policy changes come around. The most recent cuts to Medicaid, for example, in the most recent budget bill, there's pretty severe cuts.

Do we have a sense, or do you dare to hypothesize how those cuts might impact healthcare jobs overall?

GOTTLIEB: I suspect cuts would go in the direction that you'd expect would lead to less employment than otherwise, but put that in the context of a massive growth in Medicaid spending over the previous decade.

So the Affordable Care Act expanded Medicaid coverage, it increased reimbursement rates. There have been, I have some outstanding PhD students here working on the ways that states have increased their ability to extract federal money for the Medicaid program. So there's been a big influx of Medicaid funding, and we saw health care job growth during that period.

We also saw health care job growth before that period of big Medicaid expansion. So I doubt that it's apocalyptic.

CHAKRABARTI: Okay. Go ahead.

GOTTLIEB: The bigger changes ... that I think really deserve exploration are how is AI going to change the sector? We've seen automation in factories, right?

Which has changed the nature of factory work as we already heard about. Now, the same kind of thing is coming for white collar jobs. So I'm very excited to see how AI is going to change the health care production process. Are we going to see an acceleration of the trend towards being able to use people with different training or less training to work with the AI tools?

Is that going to make health care more widely accessible? Is it going to make it cheaper? Are we going to be able to do things faster, get more innovation? I don't know the answers to those questions. But I think they're ones to keep an eye on, especially for people who are thinking about where do they go with their careers.

The first draft of this transcript was created by Descript, an AI transcription tool. An On Point producer then thoroughly reviewed, corrected, and reformatted the transcript before publication. The use of this AI tool creates the capacity to provide these transcripts.