America’s infrastructure most in need of investment is human


Does caring for humans count as infrastructure? It’s a big debate in the United States right now, in the wake of President Joe Biden’s $ 2.3 billion American employment plan, which aims to repair the country’s crumbling roads and bridges and strengthen its supply chains, but also improve health and child care systems – if one can call the meager patchwork of coverage of United States a “system”.

Under Biden’s plan, $ 400 billion would be spent on home health care, mostly for the elderly. Another $ 25 billion would go to child care. Almost all Republicans, and some centrist Democrats, worry about this broad definition of infrastructure. Should “building back better” involve strengthening these services? I would say yes, and then some.

For starters, healthcare is the jobs of the future. Over the next decade, home health and personal care are expected to grow faster than other job categories, according to the labor department. This is in part due to an aging population, but also to the fact that many other jobs are automated.

Such a tech disruption will be painful for some, but it is not inherently bad. In the long run, based on historical experience, technology is a net creator of jobs. But even in the short term, as economists Charles Goodhart and Manoj Pradhan argue in their book The great demographic shift, rich countries “will need all the automation we can get in the rest of the economy in order to increase productivity adequately.” . .[and]to make up for what will be lost to take care of the aging population ”.

Care jobs will be what will stay at the bottom of the socio-economic ladder. But, done right, they can unleash more productivity at the top. The McKinsey Global Institute estimates that better health outcomes could add $ 12 billion to global GDP in 2040 – largely thanks to improved productivity of existing workers who suffer from health problems or have caregiving responsibilities.

Women in particular have a lot to gain from increased investment in the “care economy”. As Jay Powell, Chairman of the US Federal Reserve, mentionned Recently, the United States “used to dominate the world when it comes to women’s participation in the labor force a quarter of a century ago, and we don’t anymore. Maybe it’s just that [our childcare] politicians have left us behind.

Women also took an extra shot during locking. They usually did a disproportionate amount of extra child care and housework (don’t tell me about the mental health impact of that). They were also more likely to be laid off. In addition to Biden’s $ 25 billion infrastructure bill for modernizing child care centers, there is $ 39 billion more for babysitters in the Covid relief package. In an ideal world, this will expand and improve care jobs, and allow better educated women to fill more productive roles.

As with the $ 100 billion allocated to schools, these investments improve human capital. Increasingly, it’s the only type of capital that matters, as digital businesses simply don’t require as much physical capital as businesses in the old economy. The United States should also allow companies to write off investments in worker training and other investments in people, as they currently do with machines. This is something that almost any business and union leader I know would support.

Done right, investing more in healthcare infrastructure could fuel innovation. The White House is concerned about supply chains in part because manufacturing generally promotes innovation and productivity more than other sectors. But as manufacturing continues to automate, it will never create as many jobs as it once did, no matter how supply chains are organized or whether they are relocated.

Could the solidarity economy fill this job gap? Experts such as Harvard economist Gordon Hanson, who studies the interplay between labor markets and their location, say in some places it is possible. “The regions that bounce back the best tend to have good universities or healthcare complexes that can function as work engines,” says Hanson.

It may seem fanciful to imagine that a retirement home or daycare could ever be a hub of innovation like a large factory or an R&D complex? Yet some already are.

Think of places like the Cleveland Clinic, a nonprofit medical center that integrates clinical and hospital care with research and education. The subject of a Harvard Business School case study, it has become a national and international job creator, but also a pole of cutting-edge innovation in areas such as the development of drugs and devices and medical procedures. This is largely by leveraging big data, digital platforms and robotics, but also by working in an interdisciplinary manner inside and outside the clinic.

At the very least, investing more in health and education would stimulate the kind of social capital that characterizes thriving communities. We need a lot more of this now, everywhere. Only 1.5% of World Bank Concessional Grants are intended for health and only 1.9% are intended for education.

In both rich and poor countries, investment continues to focus primarily on physical capital. It is time to recognize that, perhaps more than any other form, human capital is the infrastructure of the 21st century.

rana.foroohar@ft.com



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