Health Bubble

The economy produced 151,000 jobs last month...besting virtually every month over the last two years, as these represent private hiring, not part-time census workers.

My son will be graduating high school in 2015. As he does, he'll be vying for one of those 125,000 jobs that will need to be created each month just to absorb new entrants. That is -- we need 125,000 each month just to hold steady. Last month's gains, while substantial to be sure, does nothing to lower the unemployment rate...it just keeps it steady. And it did.

My concern, oft discussed here on my monologues, is that these are likely fake jobs. No, they are not fake to the guy landing it, far from it. He needs it and is happy to get it. But they are destructive relative to the long term health of our society in my opinion.

Service jobs are exactly that -- services that assist production. They are inherently non-productive, and cannot last in an unproductive economy.

Of those 151,000, the BLS report offers that +24,000 were in food services and drinking places.
Of those 151,000, +6,000 were auto dealership salesmen.
Of those 151,000, +5,000 were in electronic retail sales.
Of those 151,000, +35,000 were in temporary help services.
Of those 151,000, +24,000 were in health care services.

I'm not bashing these jobs; far from it. I simply think that they cannot be created in a non-productive vacuum without long term consequences.

Think -- for how many months going forward can our health care system absorb 24,000 jobs? Yes, there will be increased demand due to retiring baby boomers and diabetic children raised on fast foods, but at some point, some point, we are not going to be able to continue to absorb double digit health care increases ad infinitium.

I maintain, quite openly, how blessed I am to carry a job...but I do so having prepared years earlier. I saw this shit coming -- it was visible from a thousand miles away. I ensured I carried a job that can never be outsourced or lost during a recession -- domestic energy production. I didn't pin my economic future on flipping housal units or selling hot tubs, both of which made many people wealthier than I last decade, but are not needed today.

This year, my job's health insurance costs saw a 13.4% increase. For 2011, the premiums are set to rise 7.3%. My share of this increase rises another $50 per month, while wages will remain frozen. That is, next year I will see an effective $0.50 per hour pay cut. This money will flow into those +24,000 health care jobs created. I am hardly bitching about this. I'm an economic outlier who means little to the economy -- I'm not the one out buying new cars or clothes to support it. I live below my income and won't miss this fifty cents per hour. A thousand dollars less per year into savings, I suppose.

How long can our society absorb a 20% increase every two years? My guess is that every year going forward, I'll continue to see a $0.50 per hour pay cut (or more) to support the ballooning cost of health care, and we'll continue to see electricity rate increases to support the employer paid portion of this ballooning cost of health care.

When we cannot continue to support the exploding cost of health care, we're going to see the burst of the health care bubble we're creating -- the bubble creating the majority of jobs today.