But the very real problems with the health-care system mask a simple fact: Without it the nation's labor market would be in a deep coma. Since 2001, 1.7 million new jobs have been added in the health-care sector, which includes related industries such as pharmaceuticals and health insurance. Meanwhile, the number of private-sector jobs outside of health care is no higher than it was five years ago.

Sure, housing has been a bonanza for homebuilders, real estate agents, and mortgage brokers. Together they have added more than 900,000 jobs since 2001. But the pressures of globalization and new technology have wreaked havoc on the rest of the labor market: Factories are still closing, retailers are shrinking, and the finance and insurance sector, outside of real estate lending and health insurers, has generated few additional jobs.

What they're waking up to is the true underpinnings of the much vaunted American job machine. The U.S. unemployment rate is 4.7%, compared with 8.2% and 8.9%, respectively, in Germany and France. But the health-care systems of those two countries added very few jobs from 1997 to 2004, according to new data from the Organization for Economic Cooperation & Development, while U.S. hospitals and physician offices never stopped growing. Take away health-care hiring in the U.S., and quicker than you can say cardiac bypass, the U.S. unemployment rate would be 1 to 2 percentage points higher.

Almost invisibly, health care has become the main American job program for the 21st century, replacing, at least for the moment, all the other industries that are vanishing from the landscape. With more than $2 trillion in spending -- half public, half private -- health care is propping up local job markets in the Northeast, Midwest, and South, the regions hit hardest by globalization and the collapse of manufacturing (map).

Health care is highly labor intensive, so most of that $2 trillion ends up in the pockets of workers. And at least so far, there's little leakage abroad in terms of patient care. "Health care is all home-produced," says Princeton University economist and health-care expert Uwe Reinhardt. The good news is that if the housing market falls into a deep swoon, health care could provide enough new jobs to prevent a wider recession. In August, health-services employment rose by 35,000, double the increase in construction and far outstripping any other sector.


John Maynard Keynes would nod approvingly if he were alive. Seventy years ago, the elegant British economist proposed that in tough times the government could and should spend large sums of money to create jobs and stimulate growth. His theories are out of fashion, but substitute "health care" for "government," and that's exactly what is happening today.

Nowhere is that truer than in Cleveland. There, Cleveland Clinic, with 29,000 employees, is the biggest employer by far. Next-largest is another hospital system, University Hospitals Health System, with 21,600 staffers. Then comes insurer Progressive Corp. (PGR ) and KeyCorp., each with fewer than 10,000 workers in the area. Cleveland Clinic's performance is pretty good for an outfit that started in 1921 with four docs in a building they planned to turn into a hotel if their vision didn't pay off.

Beyond its immediate employment tallies, the Clinic has a huge multiplier effect on the local economy. CEO Dr. Delos M. Cosgrove says it supports perhaps 75,000 jobs in all in the area, ranging from Clinic staffers to workers at hotels and restaurants -- which patients and their families use in more than 2.9 million patient visits per year -- to 3,000 suppliers to the Clinic.

Only a few years ago manufacturers were Cleveland's job engines. Companies such as machine-tool giant Warner & Swasey Co. don't even exist anymore. Conglomerate TRW was sold in 2002, and parts of it moved away. Fittingly, the Clinic now occupies its former headquarters, which TRW donated.

Health care has been one of the few economic bright spots in the Detroit area, too. Nancy M. Schlichting heads the sprawling Henry Ford Health System, founded by the great man himself in 1915. Schlichting is overseeing the construction of a new 300-bed hospital in West Bloomfield, Mich., a suburb of Detroit, which will eventually generate the equivalent of 1,200 full-time jobs. This expansion comes at a time when Ford Motor Co. (F ) is considering big layoffs.

Then there's North Carolina. Since 2001 it has seen a total job increase of 24,000, or 0.6%. Meager enough -- but take out the 60,000 jobs added by health care, and the state's jobs would have decreased by 36,000. Employment in manufacturing, retailing, trucking, utilities, and information all fell. And construction added only 5,000 jobs, a mere fraction of health care's contribution.

Oddly enough, the retirement meccas of Florida and Arizona are among the least dependent on health-care jobs for growth. Over the past five years the two states have gotten only 10% and 15%, respectively, of their new jobs from health-care services -- hospitals, doctor's offices, and nursing homes. Phoenix showed a job gain of 240,000, but only 30,000 were in health care. That's partly because the influx of elderly has been balanced by a rise in younger workers, too.

Is the health-care economy a good deal for workers? It is for Patricia A. McDonald, a second-year student nurse at Conemaugh. Before going to nursing school, McDonald, 46, sold insurance door-to-door, often driving close to 1,000 miles a week in rural areas to make cold calls. Her take in sales commissions was $35,000 to $40,000 a year, but that was before deducting expenses. Registered nurses in the Johnstown area, by comparison, are paid an average of almost $43,000 -- with no traveling. "This will be much better," says McDonald.

Unlike many other industries, health care offers a full range of jobs, from home health aides making very low wages through technicians and nurses making middle-class salaries up to well-paid doctors. On average, annual pay in private health services is $43,700, slightly above the private-sector average of $42,600.