From manufacturing to healthcare: How the US economy is ‘growing up’

(WGHP) — This isn’t your parents’ economy. Over the last 35 years, the American workplace — and workforce — have undergone an amazing shift.

In 1990 (not that long ago – ask anyone over 50), manufacturing was the largest employment sector in 35 states. Today, it’s the largest sector in only six states, and healthcare is the top employer in 38.

“As the aging of the population, just percentage-wise, that will take up a bigger and bigger part of the budget,” says David Larson, the managing editor of the Carolina Journal, which covers these issues regularly.

And he’s right in that since 1990, the average age of a person in the U.S. has risen from 35 to close to 40, and the number of Americans over 65 has doubled, and the economy reflects that.

“The economy is not what it used to be 30 or 40 years ago, and we shouldn’t even necessarily want it to go back there,” says Elon University economist Brandon Sheridan.

The economy, Sheridan says, is simply “growing up” with the society.

“I don’t think that we should be worried that manufacturing decline in terms of the number of total jobs somehow means that the economy is going to collapse or something like that because manufacturing now is really, really different than it used to be,” says Sheridan. “A lot of times, people hear manufacturing, and they think of people on an assembly line doing the same thing over and over for years on end. And that’s a much smaller fraction of manufacturing jobs nowadays. So now advanced manufacturing is highly technical, and the U.S. is really good at that.”

That’s why our economy has outperformed the rest of the world over these last 35 years and why, even when adjusted for inflation, U.S. GDP per capita is 22% higher than it was in 1990.

But David Larson does warn that the healthcare industry can become more efficient.

“There’s far more healthcare jobs being added in administrative roles than there are in provider roles,” says Larson.

Over time, artificial intelligence may replace many – if not most – of those administrative jobs, making the healthcare world more efficient.

One reason the economy has become more healthcare-dominant is not just the aging population but the fact that the rate of the uninsured has dropped from 14% to 8% (a 43% decline), largely due to the Affordable Care Act getting more people covered.

And if some are worried that this is a case of the “rich getting richer,” it is noteworthy that the bulk of healthcare spending on salaries has gone to nurses. Nurses have seen their income increase 82% since 1990, vs. 36% for physicians and 34% for the general public, according to census data.

All this is not to say that manufacturing in America is gone or even diminished. Although manufacturing is now 11% of GDP vs. the 18% it was in 1990, our manufacturing output has risen from $50 billion to $2.9 trillion over that same time period.

See more on this subject in this edition of The Buckley Report.

Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

For the latest news, weather, sports, and streaming video, head to FOX8 WGHP.