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Comment by munk-a | Hacker News Reader

Job sector growth (after revisions down) has been almost entirely within the healthcare industry which is quite unsustainable. We can't all get rich being a middle man between the doctor and our neighbors. Outside of that sector we're seeing economy-wide shrinkage and stagnant wage growth with a decrease in real wages relative to inflation.

This is a recession - it will be a full-on depression if we get a doveish Fed chair... it might be one anyways, we'll need extremely adroit action to recover into a healthy economic state.

But hey, DOW go up and that's all we care about, right?

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> We can't all get rich being a middle man between the doctor and our neighbors

I'm not familiar with the healthcare sector. Is this where the job growth is?

The country is getting older and I expect there would be a lot of demand for non-AI-replaceable nurses and elder care. Many of those workers have also been deported or scared out of the country.

https://old.reddit.com/r/dataisbeautiful/comments/1r21tdv/oc...

https://www.wsj.com/economy/jobs/january-jobs-report-unemplo... | https://archive.today/9gdEO

Healthcare job increases should not be unexpected as the country ages, deaths outnumber births in 21 states (as of this comment), the demand for care will only grow over time.

https://usafacts.org/articles/america-is-getting-older-which...

> As of 2024, 18% (61.2 million) of Americans are 65 or older, according to Census Bureau data. The national population over the age of 65 has more than doubled since 1980, with three-quarters of that growth occurring in the 21st century. The 65 and older group grew by more than 26.2 million people, a 74.6% increase, during that time.

https://www.prb.org/resources/fact-sheet-aging-in-the-united...

> The number of Americans ages 65 and older is projected to increase from 58 million in 2022 to 82 million by 2050 (a 42% increase), and the 65-and-older age group’s share of the total population is projected to rise from 17% to 23%. The U.S population is older today than it has ever been. Between 1980 and 2022, the median age of the population increased from 30.0 to 38.9, but one-third (17) of states in the country had a median age above 40 in 2022, with Maine (44.8) and New Hampshire (43.3) at the top of the list.

It is very unlikely the work done by CNAs, RNs, physical therapists, and others providing this population care can or will be automated.

That top graph has been shared a lot but its a somewhat disingenuous display of data. It's true that lots of growth has been healthcare in the last 2 years, but that doesn't mean zero growth elsewhere, you can see eg construction growth on the chart, which is reflected in the fact that construction is seeing all-time-high employment right now:

https://fred.stlouisfed.org/series/CES2023700001

And if you look at something that's "flat" like transportation, its still essentially at all time highs right now, its just now declining slightly, but its on the heels of major growth: https://fred.stlouisfed.org/series/CES4300000001

Now if you look at one that's negative on the graph, like retail trade, and zoom out:

https://fred.stlouisfed.org/series/USTRADE

It's still essentially at all time highs!

Serious contractions in these things would be much more worrisome, but this data is basically fine. Some losses may just be temporal corrections from all time highs, like what happened to software jobs at the end of ZIRP (though Software now has separate problems to solve wrt job market).

> I'm not familiar with the healthcare sector. Is this where the job growth is?

Real world, less so; HN-focused areas, absolutely. Nearly every mediocre, tech-focused healthcare start up is just a money siphon, no matter how many times their founders talk about “disruption”.

In actual healthcare, there are massive nursing shortages, and lots of need for people doing actual, hard, brick-and-mortar work.

There does not appear to be a recession.

https://fred.stlouisfed.org/series/SAHMREALTIME

I think it’s fair to say we are in a strange economic environment and no one can clearly say what the situation is.

To be fair, the healthcare employment flows are small (1.6M) compared to the total employment stock (160M+ people). And you would expect the healthcare labor supply to increase to match the bulge created by the baby boom. I don't think this means we will all be a healthcare middle man though; it assumes this large flow is permanent, and overstates the fraction of the labor stock.

The Trump clan literally does not care. The most pressing issues are to further legalize crypto so that the whales (including Trump's World Liberty Fund) have an exit. So there is a family/industry crypto conference at Mar a Lago while the economy is crashing:

https://www.reuters.com/world/us/goldman-nasdaq-ceos-headlin...

I mean, even ignoring the recent GenAI narrative, vast portions of the economy have already been significantly automated for decades.

Additive Manufacturing, industrial robotics, the Internet, and the proliferation of computers had already made large portions of manufacturing and low skill white collar jobs redundant by the mid-2010s.

Furthermore, the brutal reality is most businesses can generate revenue growth just by concentrating on the 90th percentile and above of households [0], (edit: or at best the 70th percentile of households of income [1]).

For example, despite all the love Costco gets on HN - the reality is it only targets customers within the top 50% of households by income [2]. You may delude yourself into thinking that you are a thrifty underdog when you shop at Costco, but the reality is most Americans cannot and will never be able to afford Costco, and Costco doesn't want or need their business.

A K-Shape Economy is actually the historical norm.

[0] - https://ourworldindata.org/grapher/income-share-of-the-top-1...

[1] - https://dqydj.com/household-income-percentile-calculator/

[2] - https://www.businessinsider.com/how-costco-sams-club-shopper...

This is my suspicion. I imagine, if you don't care about the majority of the population, you might as well reduce the economy to circular transactions between corporations and between 1%ers and the businesses catering to them.

I propose we should care about the majority of the population, and not do that.

Everyone loves to talk about neuromancer but missed when gibson went on to write a half dozen even more prescient books about exactly this process and its eventual consequences.

I personally am thankful to Gibson, and some other cyberpunk authors, for the ample warning they gave; many things ended up prescient. (Not that I heeded that warning enough, alas.)

Circular Transactions mean something else and are orthogonal to this conversation.

That said, the reality is that the 70th percentile of household income nationally is a little over $130K [0] and the US is a country with a population of around 341 Million people.

Therefore, you can have a self-sustaining consumer market with around 100 Million Americans who are members of households earning above $130k a year - you would end up with a significantly larger TAM than targeting the bottom 70%.

Most skilled (SWE, Accounting, Law), semi-skilled (Automation Engineer, Mechanic), civil service (Police, Teachers, Local government employees, Military), and union employees all marry people within this strata and remain in that strata.

[0] - https://dqydj.com/household-income-percentile-calculator/

Doesn't this mean you get siloed economies? That is, the people below the 70th percentile have their own (maybe multiple) ecosystems? Quite similar to india1,india2 and india3 in the late 2010s. This should bring about income mobility right?

Exactly! And yes - you are seeing the developing of a concept similar to India or China 1/2/3 in Western markets now.

The reality is, America1 or France1 has tastes and sensibilities closer to India1 or China1 instead of America3. As such, there's no point targeting America3 or France3, because it doesn't dramatically grow your TAM the same way India1 or China1 could.

This is why Walmart and Amazon began pivoting heavily into the India and China consumer market in the mid-2010s.

The India 1/2/3 concept that Blume Ventures came up with is a modified version of a similar mental model we used to analyze China back in the 2000s and 2010s which itself is was forked from the principle of market segmentation.

Why doesn't it make sense to target america2,3 though? What's a reason that wouldn't also apply to india2,3?

It's the same principle why India1 doesn't target India2 or India3 - it negatively impacts brand positioning for marginal gain.

That's why you find different companies targeting different subsegments of a market globally.

Additionally, we do live in a globalized world, so a brand that is at the lower rung in one market may try to upscale their value by targeting the upper portion of another market. You see this with Walmart which targets America2 but uses a different strategy to target China1 (Sam's Club China) and India1 (Best Price, Flipkart).

Conversely, a China1 or India1 brand can also try and successfully build market share in America2 and America3 in a manner that an America1 brand wouldn't want to do due to brand prestige implications. This is why you see SHEIN and Temu's popularity amongst America2 and America3 or Wellspun becoming the primary supplier for textile goods for Walmart and TJX.

I guess, the idea is that you cannot target both America1 and America3 with the same product. Take into account that America3 doesn't have a lot of disposable income in the first place, and going after a similar target audience in another country becomes a much more sensible choice than trying to expand into a different audience in your own.

> What's a reason that wouldn't also apply to india2,3?

If I understand correctly, it would also apply to India2-3, that's why nobody's proposing that.

> Additive Manufacturing, industrial robotics, the Internet, and the proliferation of computers had already made large portions of manufacturing and low skill white collar jobs redundant by the mid-2010s.

I think a much more realistic explanation than robotics and 3d printing is the outsourcing of the social and environmental costs of industrialization to countries willing to bear it, like China, Vietnam and Mexico.

Containerized shipping, email, and computerized logistics have made globalization efficient, and therefore inevitable.

Low skilled manufacturing had already left the US by the early 1990s with stragglers leaving by the early 2000s.

Heck, I used to live in LA as a kid at that time in the 90s and 2000s and the sweatshops (yes we had sweatshops) sewing clothes for Gap were staffed by undocumented Mexican, Korean, Thai, Chinese, and Vietnamese migrants in the Fashion District.

On the other hand, even highly paid manufacturing segments like automotive had already normalized industrial robotics by the early 2000s [0].

Basically, income mobility was already dead by the 1990s [1]. The difference is most Boomer HNers were insulated by that because it is clear almost everyone on HN who grew up during that era grew up in a 50th percentile and above household back then and wasn't the head of a household in the 1980-2005 period.

[0] - https://unece.org/sites/default/files/datastore/fileadmin/DA...

[1] - https://www.congress.gov/crs-product/R44705

Because it's a funny money financialization bubble that seeks to perpetuate irrational exuberance as long as possible without regards to fundamentals or externalities.

> Job sector growth (after revisions down) has been almost entirely within the healthcare industry which is quite unsustainable.

Someone has to wipe our Boomer arses. An aging population means more healthcare and less of everything else.

> Someone has to wipe our Boomer arses. An aging population means more healthcare and less of everything else

And a much more intense shift to financialization.

Pension funds tends to target an IRR of around 20-30%, and it is they that are the biggest pools of capital that funds invest.

You ain't hitting that amount of IRR without an extreme degree of financial ruthlessness.

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