Returns to Education

Returns to a College Education

"Seven years of college down the drain."
-John Blutarsky

Mr. Blutarsky, as many will remember, offered the conclusion above to his Delta house frat brothers following their especially memorable meeting with Dean Wormer. The statement is correct. Anyone who attends college for seven years only to be expelled without a degree, and with Mr. Blutarsky's zero point zero GPA will not earn any return on their college investment. Otherwise though, expect college to pay.

Occasionally in the popular press there will be an article discussing the trials and troubles of college graduates in the market place. Someone's promising son with a BA degree in management science cannot find a job and after hundreds and hundreds of unsuccessful applications he takes a job with a gutter cleaning company. He cleans gutters. A quotation from the hang wringing parents usually includes "Our college investment was a waste. It's not like it was in the good old days."

Let’s not be too sure. Remember that graduation from college for the many who attend college right after high school implies entry into the labor force at age 22. The social security retirement age is 67 years. Congress and the country are expecting 45 years of work. One bad year does not assure ruination and a life hanging on the eves. If we can presume that a management science degree means a person with some skills and curiosity, it is quite possible that advancement to gutter crew supervisor and then perhaps gutter manager is in the future. Maybe college skills give him the ability to start a gutter cleaning firm and then a gutter cleaning franchise. Millions earned as a franchise tycoon could be the future, it is hard to tell because figuring an accurate investment return for 45 years requires knowledge of interest rates, inflation and future salaries. Past trends give some ability to know these things, but the key components can only be estimated over such a long period of time. It is better to focus on the near term, which usually gives the correct answer anyway.

There are several ways to estimate returns on investments in education, or other types of investments for that matter. The need for calculations of compound interest gives the impression that investment returns are precise and use only one procedure. However, there are different procedures, even though the actual arithmetic is always precise. Economists, for example, like to include the time in college as time away from work. If time in college is time away from work then lost or foregone wages as well as tuition payments will be a cost of college and included in calculations. Those less devoted to the economist’s way might wonder why time in college is time away from work. Many go to college and work. The time in college might come from leisure or free time instead of work. The matter is in doubt and depends partly on preference.

Despite the need for choice in computing educational return a few comparisons can give meaning and substance to the great American cry "Get some training." High school degree or GED skills are general workforce skills. Millions of America’s jobs need only on the job training and general workforce skills. If we look at wages for some of the jobs with general workforce skills and compare them to other positions requiring college degree skills we can make some easy comparisons.
Suppose a brokerage clerk earns the median wage reported for brokerage clerks, but wants to go to college to become a personal financial advisor. The median wage reported for brokerage clerks is $36,390; the median wage for personal financial advisors is $66,120. If the difference of annual income is more than a year of college tuition, expect college to pay.

Suppose a bookkeeper earns the median wage reported for bookkeepers, but wants to go to college and become an accountant. The median wage for bookkeeping is $30,560; the median wage for accountants and auditors is $54,630.
Suppose a teaching assistant earns the median wage reported for teaching assistants but wants to go to college to become a certified teacher. Teaching assistants earn a median salary of $20,740; certified public and private school teachers have a median wage of $45,000 to $47,000.

Check wages between civil engineers and civil engineering assistants, or architects and architectural and civil drafters, or physical therapists and physical therapists aides and so on. For the many jobs where annual wages jump more than a year’s tuition, compound interest calculations are not important.

Rather than comparing reported wages it is possible to convert college tuition and expenses into an estimate of a minimum wage or minimum salary increase that will make college a paying investment. The process requires interest calculations because money paid for college tuition and expenses could be used to buy stocks and bonds or other interest earning assets. Tuition and expenses amounts to an investment in a higher paying job, even though college students may want to go to college for other reasons.

Suppose in-state tuition at public college is $6,000 per year each year for four years. In some states like North Carolina, the state tuition is reported as $3,886, while in others like Michigan it is $7,115. Some are above, some below $6,000, but we let $6,000 be a representative tuition for 2007. In the first year $6,000 invested in stocks and bonds would earn interest or dividends. Similarly in the second year, except $12,000 would be invested and the second year earns interest or dividends on $12,000. At the end of four years at the time of graduation the principal invested and the interest earned is a total amount, which will equal $27,230.82 at 5 percent interest. Our thanks for the $27,230.82 total goes to the built in spreadsheet functions on MS Excel.

Suppose instead it is necessary to borrow the $6,000 each year to pay tuition. Not every one has $6,000 a year to invest in anything, much less a college education. Borrowing the money does not change the calculation unless interest rates differ between borrowing and investing. To have the college investment pay, a higher income stream from a higher paying job must be equal to, or greater than, monthly earnings on $27,230.82. If we presume the same 5 percent interest rate, then borrowing only changes $27,230.82 of equity investment into $27,230.82 of debt. Either way the college investment amount is $27,230.82 after four years.

The principal amount of $27,230.82 earning 5 percent interest over the next 10 years and compounding monthly will be equal to $44,849.42. Start at graduation and $288.82 of extra income each month over the next 10 years using 5 percent interest will also be the same $44,848.63. The $288.82 equals the minimum extra monthly earnings necessary to pay for a college education at an interest rate of 5 percent. A lower interest rate will lower the amount of necessary earnings; higher interest rate will raise the amount. Using a forty-hour week and 160 hours a month it is less than $2.00 an hour of extra wage and salary that pays for college. Experiment yourself. Use the Excel help file under FV, which stands for future value. The spreadsheet entries above are =FV(.05/12,120,0,-27230.82,1) and =FV(.05/12,120,-288.82,0,0).

The $288.82 a month could go up or down depending on a number of variables and there is some additional risk using debt to pay for college. There is a difference of risk between debt and equity financing college because there can be a delay in getting a better job. Delays leading to missed loan payments mean unpaid interest added to principal, making it quite possible to be overwhelmed with rising payments. This could be true even though a delay may not make the investment unprofitable over the long term.

Bad timing could ruin an otherwise paying investment, but even long delays getting a better job or periods of no additional earnings will probably not eliminate the financial advantage of a college degree. Maybe our management science major above waits 10 years to get a job with a raise. After 10 years he has nothing to compare against the $44,849.42 mentioned above. But suppose he lands the right job and makes extra income for the next twenty years. The $44,849.42 at 5 percent interest will be $121,660.74 after twenty more years, but extra earnings of just $295.98 a month for those same twenty years will equal $121,657.75. Any amount of additional earnings over $295.98 a month at 5 percent interest over those twenty years and college pays.

Suppose interest rates go from 5 to 10 percent in the example above where tuition was $6,000 per year. The same $6,000 per year for four years goes up to $30,975.84 from $27,230.82. The higher principal will increase much faster at 10 percent over the next 10 years and compounding monthly will be equal to $83,852.88 instead of $44,849.42. The minimum monthly wage and salary increase necessary to pay for college tuition at 10 percent over the next 10 years jumps to $409.34 per month instead of $288.82. Higher interest rates make college a less attractive investment, but millions of jobs open up to college graduates that will cover a salary increase of $409.34 a month for 10 years.

In the present circumstance of education, jobs and interest rates, the extra monthly earnings necessary to pay for college is low enough to expect college to pay. It is not a guarantee, but comparing current graduation with job growth and job openings further suggests that college graduates will earn at least the minimum salary increase to make college pay.

Baccalaureate degrees were 1.4 million for the year ending June 2005 with degrees up every year since 1994 when the baccalaureate total was 1.1 million. The Bureau of the Census, Current Population Survey reports educational attainment for adults over age 25. Those employed with a BA degree or higher are up and although the increase has been fluctuating in recent years, the increase averages 1 million to 1.1 million a year in the years leading up to 2007.

The Current Population Survey counts people employed and not specifically their jobs. It does not tell us if the increase of people with new degrees also find jobs using college degree skills, only that they are finding jobs. Other surveys of the Bureau of Labor Statistics count jobs and occupations for establishments. Establishment jobs ended the calendar year 2005 with 2.3 million more jobs than 2004, but we should expect new graduates to be looking for new jobs using their college degree skills. There is help in counting the jobs using college degree skills because the Bureau of Labor Statistics publishes a skills taxonomy that gives a clear assessment of the jobs that need college degree skills, along with those that do not. In 2004, establishment jobs with a Bureau of Labor Statistics skills classification needing a BA degree, masters, doctorate, or professional degree came to 26.4 million. The number of college degree jobs increased an average of 950 thousand for the years from 2004 to 2006, when the new total is 28.3 million.

If you are paying close attention, you noticed new degrees outnumber new jobs using college degree skills, but chances for a new job improve the more current job holders leave the workforce to retire or for other reason. People who retire need to be replaced before there can be growth. Replacing people in addition to job growth is defined by the Bureau of Labor Statistics as job openings. Openings in any occupation that has job growth will be greater than job growth. If jobs are declining, openings will be limited to replacement jobs, but otherwise openings are greater than job growth. Openings for jobs using college degree skills are forecast by BLS to increase at 1.2 million a year through 2016.

Even though college graduates are increasing faster than jobs and openings in the Bureau of Labor Statistics college degree categories, the difference is modest. However, it is not necessary to have a job using college degree skills to make college pay. Moving from a job as bookkeeper to an accountant with a college degree makes it easy to establish cause and effect for higher pay and a college degree. That is important because making college pay depends on a higher wage because of a college degree. Often it is easy to establish cause and effect like the bookkeeper who becomes an accountant, but not always.

Sometimes people with college degrees take jobs that do not need college degree skills. Employers might prefer people with college degrees even though they might be over qualified for the work. They might pay someone with a college degree more than a high school graduate in the same job. Cause and effect is hard to establish, but it would be necessary to have a college graduate in a high school job and earning no more than high school graduates if college does not pay. Making college pay is a financial matter, not a matter of job title or status. As of 2007, the financial evidence is clear enough to predict college will pay.

Read More

Ten Year Change Report

Ten Year job Change Report

When the BLS situation report comes out each month job totals go up. An increase in jobs is an easy forecast because the population is growing. In 1990 the Bureau of the Census reported 189 million in the civilian population older than 16. After 17 years of continuous increase the civilian population reached 231 million in 2007. Population and jobs go together because people have to have jobs. Large scale unemployment in an urban society guarantees untenable social, economic and political conditions. Politicians will do whatever is necessary to keep spending high enough to generate new jobs, but it is not enough to ask if jobs are increasing. It is more important to ask if they are increasing enough to sustain a society that relies on jobs for self support?

One way to look at job growth is to make a chart of job differences over a long period like 10 years. Suppose we take monthly data for employment for December 2007 and subtract it from monthly data from December 1997, exactly 10 years before. The difference gives the increase or decrease for the decade from December 2007 to December 1997. Suppose further we back up a month and take the difference of November 2007 and November 1997 and so on. That way there is a number that equals the increase, or possible decrease, over ten years that can be paired with its date and plotted on a chart. Fellow bloggers are invited to review the series of charts below and make up their own mind about jobs.

Pictures Worth a Thousand Words

Chart 1 below has a plot of monthly 10 year change for the civilian labor force plotted from January 2000. Notice among the ups and downs that Chart 1 starts out on the left side with a number just under 17 million. Therefore, the labor force in January 2000 is about 17 million more than January 1990. Notice on the right side of the chart that 2007 ends with a number just under 17 million making the current labor force about 17 million more than January 1997. Even though the Chart gyrates there is no overall trend of differences. It remains roughly flat with an average 10 year monthly gain around 17 million a month over month.

Chart 1 - Civilian Labor Force 10 Year Change



Chart 2 plots 10 year changes for non-farm establishment employment. Around May 2001 there were 24 million more establishment jobs than May 1991. After that the ten year change of new jobs starts to decline and keeps declining month after month after month until around March 2005. It levels off some and then declines further up to the end of 2007. The decline contrasts with continued growth of population and steady change in the labor force. The last month on the Chart is Decmber 2007 with an increase of 14.1 million.

Chart 2 - All of Non-Farm Establishment Employment 10 Year Change



The remaining charts, Charts 3 through 11, show 10 Year job changes in the same way but for broad industry categories. Chart 3, goods production jobs in natural resources, construction and manufacturing helps show America's transition to a service economy. The remaining charts are all service charts and we have to hope there are enough good jobs in services to make a smooth transition to that well publicized service economy.

Scroll down to Chart 4 with Wholesale and Retail Trade, Transportation and Utilities, and Chart 5 Information Services. Keep scrolling to find the profile for financial activities, business and professional services, public and private education, health care, leisure and hospitality, which is mostly restaurants, and government employment excluding education. Remember the government the great engine of employment.

Chart 3 - Goods Production - Natural Resources, Construction, Mfg 10 Year Change



Chart 4 - Wholesale and Retail Trade, Transportation and Utilities 10 Year Change



Chart 5 - Information Services 10 Year Change



Chart 6 - Financial Activities - Banking, Credit and Real Estate 10 Year Change



Chart 7 - Business and Professional Services 10 Year Change



Chart 8 - Public and Private Education 10 Year Change



Chart 9 - Health Care 10 Year Change



Chart 10 - Leisure and Hospitality 10 Year Change



Chart 11 - Government excluding Education 10 Year Change

Read More

Service Jobs - Summary

On this post we want to summarize the big picture of changes to service providing jobs from 1990 through 2010. The table below highlights sector job counts detailed from the sector job posts above. Remember it does not count people employed, which averaged 139.1 million for 2010. People employed counts wage and salary employment and the self employed both in and out of agriculture. The table below counts jobs, otherwise known as establishment employment without any self employed, which had a monthly average total of 129.8 million jobs in 2010. Jobs do not equal people employed because one person can have two or more jobs. One person with two jobs is counted twice in the jobs data, but once in the people employed data.

Summary of Service Industry Employment with pie charts below



Columns (2) and (4) in the table have annual average establishment employment by North American Industry Classification for 1990 and 2010. Columns (3) and (5) have their respective percentage shares of establishment employment with column (6) showing the gain or loss of jobs from 1990 to 2010. Column (7) has the difference of the percentage of sector employment for 2010 from the percentage for 1990. As a computation it is column(5) minus column(3). For example, row(2) shows changes and percentage shifts in goods production. Goods production employment declined 7.99 percent.

Column(8) translates the share changes into jobs from a share loss. For example row(2) shows 5.968 million jobs lost for goods production employment. If good production had maintained its share of employment as it was in 1990 there would be 10.373 million more goods production jobs than there are in 2010. The number is the product of total establishment employment in row(1) and column(4) and the percentage gain or loss in column(7). Notice that the loss of goods producing employment exactly equals the gain of service providing employment. The other rows in column(8) are computed the same way and distribute the share gains and losses between different industries.

The gain for service providing employment is not evenly distributed across service industries. The gainers are grouped at the top of service prviders and together they have an 9.07 percent gain. The losers are grouped at the bottom of service providers and together than have a 2.93 percent loss. Their combination equals 7.99 percent.

The table also highlights the shift of employment within service providing industries, where there are 14.178 million new jobs that resulted from an industry's percentage increase of all jobs. This constrasts with 3.805 million jobs lost that resulted from an industry's share decreases. The combination exactly equals the 10.374 million gain for service providing industries and the equivalent loss for goods production.

Two pie charts give a visual look at the changes in shares. The first chart has the percentage split of the nearly 14.18 million jobs in share gaining service sectors. The second chart has the percentage of 3.8 million jobs in share losing service sectors.

Distribution of 14.18 Million Job Share Gains by Service Sector 1990-2010



Distribution of 3.81 million Job Share Losses by Service Sector 1990-2010

Read More

Service Jobs - Government

Government

Total government employment for federal, state and local government equals 22.5 million as of 2010. Government, excluding education and public hospital employment has 10.8 million jobs, which is the difference of 22.5 million and 10.4 million jobs in public education and 1.3 million public hospital jobs.

Jobs in government excluding education and hospitals include office work for executive offices, regulatory and legislative bodies, and the judiciary, but also all the rest of the jobs in parks, recreation, public health excluding public hospitals, public works, corrections and a few more. Federal employment includes the postal service and defense department among others.

Government produces valuable services. Valuable production should be added to Gross Domestic Product to reflect our hard work and productive capacity, but government’s valuable services are rarely sold so there is no market value to record as production. What is it worth to have Congress spend months passing environmental legislation, then to have executive bureaucracies write regulations to administer the law, and then to have courts hear law suits to interpret the law?

There is no ready measure of values to include in GDP so the practice is to value government services at cost. Government cost of production though is labor cost only. When the government buys computers and reams of paper it is recorded as a final sale from business to government. Since the goods and services government buys are already included in GDP as part of business final sales, they are not added again. Government’s cost of labor to provide services represents its contribution to GDP. It guarantees that more government jobs mean more Gross Domestic Product.

The decision to use labor cost as government’s addition to GDP is a sensible compromise in the computation of GDP. Since the objective of computing GDP is to measure our productive capacity, government work should not be ignored. No attempt is made to differentiate between one type of government labor and another. When services are bought in common as they are with government they could be for anything.

On April 1, 2005 the Washington Post published an article about a Congressional investigation: “Cost of Cisneros Probe Nears $21 million Over 10 years.” Cisneros was President Clinton’s Secretary of Housing and Urban Development way back in 1995. Congress authorized an independent counsel investigation after allegations that Cisneros lied about payments to his mistress. After 4 years and $10.3 million dollars of investigation, Cisneros pleaded guilty. That was in 1999, but the investigation continued in order to investigate if anyone attempted to obstruct justice, the Washington Post reported. The continued probe added another $10.7 million to the expense, hence the caption “$21 million over 10 years”.

We could say America would be better off if the money used on the Cisneros investigation went into medical research or highway construction, but that is different from saying government should reduce its total expenditures, or even that it wasted money. Either expenditure pumps $21 million into the economy and any cut in government spending whether it is for medical research, highway construction or Cisneros probes will reduce GDP and harm employment. Government is a major employer and even though the government has money to pursue what appears like a political vendetta, as in the Cisneros case, America needs government that is actively creating or inventing jobs.

The current expenditures of government add up to $4.997 trillion in 2008 or nearly 35 percent as large as Gross Domestic Product. It is a big enough share to think that government spending by all levels of government provides a mighty engine of employment. All this spending is supported by taxes and borrowing. Taxes reduce private spending and job creation, but those in government are experts at spending all their revenue as fast as they can. They run deficits and make debt finance a way to pep up employment and put off higher taxes. The federal government can borrow but also controls the money supply so it can create money to cover its spending and put off collecting taxes. Local governments can use bond-funded projects to speed up and enlarge spending in the near term and let the growth in property values and higher property taxes pay for capital projects in the future.

The decision to do Cisneros probes or build roads and highways is the decision of government. Builders and developers build a few roads in their new developments, but the roads that get people from here to there are planned and funded by a government. The actual building is typically contracted to private firms in the highway, street and bridge construction industry. The people who work in this industry are counted as part of employment in private business and not counted as government employees. Government employment is already large, but undercounts employment that is the result of government taxing and spending such as employment in the highway, street and bridge construction industry since they are on private payrolls even though their jobs are really the result of government spending. The terms government contractor, outsourcing and privatization all connote private businesses, but they are private businesses doing government funded and government sponsored work. Government employment added to government sponsored employment is more than a mere 22.5 million: much more.

Government creates many jobs both in and out of government but the jobs it has for those on government payrolls has lots of work that develop and support specialized skills and careers in life science, physical science, social science, finance, law, corrections, and transportation. Some of the work is not done anywhere else and requires government funding. We are excluding the jobs in education or public hospitals.

Many of the government’s specialized and professional jobs require college degree training but especially baccalaureate degree training, and that is without mention of the millions of jobs in education, since we are only discussing government excluding education. Nearly 43 percent of jobs in the Federal Government require BA degree skills or higher; 34 percent in state government; 17 in local government.

In life science occupations, conservation scientists, zoologists, foresters, epidemiologists, soil and plant scientists have anywhere from 30 to 80 percent of jobs in government. In the physical sciences, astronomers, atmospheric and space scientists, environmental scientists and hydrologists depend on government to maintain their work and support jobs. In the social sciences 90 percent of forensic scientists and more than 70 percent of geographers work for government. Government employs nearly 30 percent of social scientists. Over half of social scientists in political science and economics work in government jobs, although the percentage applies to those actually working as economists and political scientists and not those teaching at schools and universities. They are counted as faculty in education totals.

In engineering, agricultural engineers, civil engineers, and environmental engineers have 20 to 40 percent of their jobs in government. Government is the biggest employer of mathematicians, statisticians and cartographers who work in jobs outside of teaching.

Counselors and social workers have 266.7 thousand jobs on government payrolls for those working as practitioners, but many work in health care where government supported or subsidized health care supports another 362.5 thousand jobs. Those totals do not count those teaching and working at schools and universities where there are 266.8 thousand more jobs. Counselors and social workers owe their employment to government.

Then there are courts that employ 100 percent of judges, magistrates, administrative law judges, hearing officers and bailiffs, but almost two thirds of court reporters, 53 percent of law clerks and more than 21 percent of lawyers. All of these are over 250 thousand jobs.

The courts enforce laws but law enforcement has more than 625.6 thousand government jobs as police and sheriffs patrol officers, another 109.8 thousand as detectives and investigators, but more jobs as fish and game wardens, parking enforcement officers, railroad and transit police, crossing guards, lifeguards and a few more.

Law enforcement generates prisoners. The Bureau of Justice Statistics reports 7 million Americans under correctional supervision, or 2.1 million in prisons and jails, 765 thousand on parole and 4.1 million on probation for 2004. American needs jobs and millions of prisoners create lots of jobs: 433,200 reported jobs as correctional officers and jailors, 38,200 jobs as first line managers of correctional officers and jailors and 86,600 jobs as Probation Officers and Correctional Treatment Specialists.

Outside of the office bureaucracies there are jobs like agricultural inspector, construction and building inspector, highway maintenance worker, power plant operator, water and sewage treatment plant operator where 30 to 90 percent of the jobs are on government payrolls. Over 416.9 thousand work in government transportation jobs with many as air traffic controllers, ambulance drivers, transit bus drivers, subway and street car drivers, bridge and lock tenders, and traffic inspectors among other jobs.

Do not forget the postal service where 747 thousand work and 537.4 thousand work as postmasters, postal clerks, mail sorters, and letter carriers among other jobs. Remember too we are talking about civilian employment so the armed forces are not included here.

Government bureaucracies support a high percentage of jobs in office administration and support jobs. In the federal government the average for office administration and support is 13 percent; in state government, excluding education, and in local government excluding education, 19 percent.

Between 40 and 50 percent of jobs as budget analysts, financial examiners, and appraisers of real estate are in government. All of tax examiners, collectors and revenue agents work for government more than 68.5 thousand strong, and they support thousands more jobs at accounting firms and tax services.

With a 112.1 million service jobs to divvy up, government service, excluding education and hospital employment gives us 10.8 million jobs, but that is only 8.5 percent of establishment employment. There are no more service jobs left and we have distributed all 112.1 million of them by their NAICS sector categories.

In the period from 1990 to 2010, good production employment declined 7.99 percent as service providing employment increased by 7.99 percent. Remember good production equals the total of jobs for natural resources, principally mining and logging, construction and manufacturing. Manufacturing employment went down 7.3 percent with all natural resources, construction and manufacturing employment in decline. The 7.99 percent decrease is a net, which disguises an even bigger shift out of manufacturing employment.

In service providing employment the 7.99 percent increase disguises shifts within service sectors because even though the net increase is 7.99 percent there are sectors that decreased and a combination of services that increased more than 7.99 percent. It is time to make a summary of service employment changes, which comes up next.

Read More

Service Jobs - Food-Accommodation

Accommodation and Food Services

Accommodation and Food Services jobs total 11.1 million in 2010. The accommodation part has traveler accommodations, not residential accommodation. Include hotels, motels, bed and breakfast inns, casino hotels, RV parks, campgrounds and rooming and boarding houses. Rooming and Boarding houses include dormitories, fraternity and sorority houses.

Establishments primarily engaged in preparing food to order for immediate consumption go in this sector as full and limited service restaurants but the key words are preparing food and immediate consumption. Food services have to have both and the definition also fits fast food outlets, cafeterias, pizza delivery, snack bars, takeout, catering, ice cream parlors, and beverage bars. Establishments primarily selling food prepared elsewhere and not packaged for immediate consumption are counted with grocery stores.

Accommodations have 15.8 percent, or 1.76 million of the jobs, where as foodservices has the other 84.2 percent, or 9.35 million of the jobs. However, other sectors have restaurant jobs. For example, a hotel could run a restaurant even though it is primarily engaged in running a hotel. There is one establishment with hotel workers and food service workers. The same hotel might lease their first floor to an independent restaurateur so there might be two establishments, a hotel and a restaurant. In the former the jobs are counted in the accommodation sub sector, and in the latter, food jobs are split between accommodation and food services.

Food service occupations are cooks, bartenders, hosts and hostesses, waiters and waitresses, counter attendants, bartenders, dishwashers and few jobs as drivers, and cashiers. These jobs are 90 percent of restaurant staffing and about 25 to 27 percent of hotel, motel and accommodation staffing. Only about 77 percent of these jobs are actually in the food services sector with the rest scattered in accommodations, in health care where hospitals run food services, at schools which have cafeterias, at ball parks and theatres which run restaurants and sell fast food.

The accommodation industry has significant building and grounds maintenance work with 29 percent of jobs. Maids are 23 percent of hotel-motel employment; desk clerks have nearly 12 percent of jobs. Managerial positions are barely 2 percent of employment in accommodations and food services and mostly confined to food service managers and lodging managers, but also gaming managers since casino hotel jobs are here.

Only a few jobs or occupations use college degree skills and not too many stay around to make restaurant work a career. The net separation rate for an occupation measures the percentage of new entrants needed to replace people who permanently leave an occupation. In restaurants net separations for waiter and waitress tend to be above 50 percent, and serving and counter attendants also have separation rates 50 percent and above. Those ages 16 to 24 work in restaurants but many leave for other occupations. Even so there are millions of jobs and they keep increasing. Add the 9.35 million jobs in restaurants mentioned above to the other food service workers in accommodations, schools, hospitals, retail stores or ball parks, museums and other recreation facilities and the total comes to a little over 11.0 million food service jobs.

Cooking used to be one of America’s biggest do it yourself occupations. Everyone can stay home and cook, but more and more we go out. In the production-marketing chain of food this helps our employment and probably more than most people realize. Start on the farm and let’s count America’s farmers. Next add all the jobs in pesticide, fertilizer and agricultural chemicals, and all of the jobs in agricultural implement manufacturing. Add in the jobs at farm supply wholesalers, and farm raw material wholesalers. Then move on to food manufacturing. Add all the manufacturing jobs milling, canning, freezing, bottling, refining, slaughtering, baking, brewing, distilling, fermenting and packaging. Add them to grocery store merchant wholesaler jobs and all the jobs at grocery stores, convenience stores, liquor stores and food stores. The total comes to 6.82 million jobs in 2010.

Worse, jobs from the farm to the supermarket continue to decline due to productivity growth and imports in the global economy. Restaurants are the only part of the food chain Americans can count on for new jobs. You may like to go to restaurants; you may need to go to restaurants, but America needs jobs, so now you know, you must go to restaurants. It’s your civic duty. Go out often.

Maybe a few get rich in the restaurant business but if we look at the wage data reported for the BLS occupational employment survey, then food services wages are dead last among America’s jobs with a median annual wage of $18,770 in May 2010, which is down slightly less than inflation from 2009,but up slightly from $13,820 in 1999 and most years of the last decade. The reported and published wages are supposed to include tip income, but that implies the managers reporting wages for the Occupational Employment Survey know what they are.

With a 112.1 million service jobs to divvy up, accommodation and food services employment gives us 11.1 million jobs, but that is only 8.6 percent of establishment employment. Accommodation and food services employment is growing faster than the national rate. We have to expect a relative increase in accommodation and food services in national employment. We only have 1 sector left to go, government with 10.78 million jobs.

Read More

Service Jobs - Repair-Main-Personal

The Last Three Services from the Other Sector

There are four sub-sectors that were put into the sector classification called, Other. One was Non-Profit organizations discussed earlier. The other three service sub sectors have little in common with each other, or non-profit organizations. They are Repair and Maintenance Services, Personal and Laundry Services, and Private Households.

Repair and Maintenance had a monthly average of 1.14 million jobs in 2010 with 70 prcent of jobs in car and truck repair. That total includes 131 thousand employed at car washes along with other jobs at bump shops and auto glass replacement. Car crashes reduce our well-being but create jobs and production adding to the gross domestic product.

The rest of Repair and Maintenance has 337.1 thousand jobs at establishments fixing or maintaining commercial machinery and electronic equipment, or fixing household goods. More than half of these jobs are in the commercial segment. Establishments doing household repairs for lawnmowers, appliances, shoe repair, watch repair, upholstery and a few more have around 67.9 thousand jobs.

Personal services had 1.264.8 million jobs in 2010. Beauty parlors and barbershops have 600.4 thousand jobs and growing. The rest of the jobs are at funeral parlors, cemeteries, crematories, laundry and dry cleaning, pet care, photo finishing, and parking lots. Laundry services and photo finishing jobs continue to drop a few thousand a year. Parking lot jobs are up generally, but down slightly from the 2008-2009 recession, now at 111.2 thousand jobs.

Pet Care Services employment is up with more jobs every single year since 1992 and now at 61.6 thousand. The only work with lots of jobs in the Pet Care Services industry has the quaint Bureau of Labor Statistics definition: Non-Farm Animal Caretaker. Their job description turns out to be a list of down to earth activities: train, feed, water, groom, bathe and exercise animals, and clean, disinfect and repair their cages. There are 88 thousand of them and some work at zoos but quite a few work personal services, mostly as kennel workers and dog walkers.

Few jobs need college degree skills in any of these sub sectors, around one percent actually. Repair and maintenance and personal service firms have very similar staffing in that they all tend to have a manager, a receptionist, an office clerk, a bookkeeper and maybe a secretary or someone else in office administration. After that it is jobs doing services.

Many jobs here in installation, maintenance and repair require training and experience and the best jobs in these sub sectors are doing these occupations. Automotive Service Technicians and Mechanics have 221 thousand jobs just in auto repair shops out of 587.5 thousand total jobs. Other auto mechanics work at auto dealerships or for gasoline stations. About another 103.4 thousand do car body repair or replace broken glass out of independent shops.

Electrical and electronics installation, maintenance and repair occupations have 47.6 thousand out of just over 602 thousand jobs. Many of these jobs are also in manufacturing, retail and the telecommunications industries.

Private households are classified as an industry in the North American Industry Classification System because households employ cooks, maids, butlers and caretakers to produce services at households. These services are transactions and production and so they are counted as part of the GDP and given their own sector. They are not counted as part of establishment employment because households are not establishments for purposes of establishment data. The Bureau of the Census reports 803 thousand jobs in non-agricultural households with more than 90 percent of the jobs as maid, nanny, personal aide and cook. However, they are not in the 112.1 million of total national service employment, even though they are definitely services.

With a 112.1 million service jobs to divvy up, repair and maintenance services and personal services employment gives us 2.4 million jobs, but that is only 1.9 percent of service employment. Repair and maintenance services and personal services continue to grow but slowly and less than the national average from 1990 to 2010. They will continue to lose share even though they have more jobs. We have two sub sectors left to go: accommodation and food services, and government service, excluding education. The two sectors have 22.1 million jobs.

Read More

Labor Market Forecast

Forecasting Labor Market Trends from 2006 to 2014

On this blog we believe forecaster’s would have a bigger following if they would explain more about their methods, which are not that complicated. Forecasting requires a blend of technique and a set of assumptions. For example, forecasting labor markets for the years ahead depends on the continued physical availability of gasoline. Shut off the gasoline and forecasts go haywire. Lack of gasoline will affect all economic forecasts, but labor markets have their own assumptions and peculiarities, which if discussed and described will improve the credibility of forecasts.

The links here go first to the national forecast and forecast table and then to progressive levels of forecast detail. Second, there are things to know in labor forecasting. Third, there are forecasts of relative growth and change by sectors for high growth, slow growth and decline. Fourth, there is a discussion for each of the 22 sectors from the forecast table.


The Forecast

The national non-farm jobs projection calls for an average of 1.876 million new jobs per year or an increase from 136.174 million establishment jobs in 2006 to 151.182 million jobs in 2014, which is just more than 15 million new jobs. That is an annual growth rate of 1.32 percent in the years 2006-2014. The growth rate from 1990 to 2006 was 1.37 percent so the projected growth rate is just below the most recent average annual growth rates. The forecast table below divides the total increase into 22 industry sectors and gives a summary by sectors.

Forecast Table



top

Things to know in Labor Forecasting

First, long term forecasts use different methods than short term forecasts. Monthly or quarterly job forecasts use the same methods and carry the same risks as forecasting business cycles or recessions and expansions. Multi year forecasts ignore cycles and develop defensible yearly trends based on movements in population, productivity, technology and trade in the global economy. The forecasts above are long term annual forecasts.

Second, long term job forecasts start with population changes. The civilian population over age 16 continues to grow. Since 1990 the compounded annual rate of growth equals 1.2 percent using Current Population Survey data. If we projected that jobs would increase by population growth it would be a decent long term estimate since we know a growing population requires jobs. We can do better than that because there is more data and we want some details.

Third, a steady percentage of adults enter the workforce. In 1990 the civilian labor force was 66.5 percent of the civilian population; in 2006 it was 66.2 percent, where the civilian labor force includes the employed plus the unemployed actively seeking work. There are minor fluctuations month to month but for the last 20 years 66 percent and a fraction of adults entered the labor force. In the future we can be confident 66 percent of a growing adult population will be working or looking for work. The percentage does not gyrate and if it grows it will grow slowly.

A predictable percentage of the population entering the workforce helps a lot in forecasting. From 1990, the civilian labor force grew at an annual rate of 1.16 percent, employment grew at an annual rate of 1.23 percent and we already know from above that the civilian population over age 16 grew at 1.2 percent. Because the population totals are so much bigger a change in the flow of people entering the workforce, or a change in the flow of unemployed can cause the rates to vary, but as we can see they do not vary very much. That makes it possible to move from population growth to job growth in predictable way.

Fourth, employment data is subdivided by class. Start with 144.4 million people employed. The first subdivision breaks employment into agricultural and non-agricultural employment. Agricultural employment is down to 2.2 million and its sinking: down, down, down. It is 1.5 percent of employment for 2006 leaving 142.2 million in non-agricultural employment, or 98.5 percent of people employed.

Non-agricultural employment has its own sub divisions for wage and salary employment and the self-employed which include unpaid family workers who work 15 hours a week or more in a family business. Out of 142.2 million nonagricultural employed 132.4 million are wage and salary employment and 9.8 million are self employed. The 132.4 million people employed in wage and salary employment are almost 92 percent of the 144.4 million total from above.

The wage and salary employment cited above are people working. They might have one job or they might have two, but they are counted once in wage and salary employment. At the Bureau of Labor Statistics they also count jobs as part of their Current Employment Survey. Jobs and people employed in wage and salary employment are almost the same, but not quite. If one person has two jobs, or for that matter three or four jobs, they are counted as one person in wage and salary employment, but the Current Employment Survey counts jobs so a person holding two jobs gets counted as two jobs in jobs data.

The wage and salary employment of people and the number of jobs both increased at the same annual percentage rate of growth from 1990 to 2006; it was 1.37 percent per year. Because some people hold two or more jobs the 2006 total of jobs is 136.2 million jobs, an amount nearly 4 million more than the number of people in wage and salary employment from above. These projections on this blog are for jobs data.

top

Forecasting Relative Change by Sector: High Growth, Slow Growth and Decline

In labor forecasting jobs will go up if the population goes up and for national forecasts such as these we know population has been growing and will be growing. If the jobs in all 22 sectors increased at the same rate as the total of non-farm jobs then there would not be any shift in relative share of jobs and all sectors would gain enough new jobs to maintain their percentage of the total. More would be working but all in the same proportion from one year to another. However, growth rates among the sectors vary and make up three distinct categories of change, which are high growth, slow growth and negative growth.

Looking at the forecast table you can tell the difference of the three categories by the annual growth rates in the last two columns. Those sectors with growth rates above the non-farm growth rate gain relative share; those with growth rates below the non-farm average but still positive will gain jobs but lose relative share; those with negative growth rates will lose jobs and lose share. The 22 sectors are listed in the categories below with further discussion and background by sector below that. Remember the annual average growth rate from 990 to 2006 is 1.37 Percent.

The first category has growth rates greater than the national average for 1990 to 2006 and forecasted for 2006 to 2014. High growth rates in the first category include 10 of the 22 sectors that continue to grow and have a bigger share of America’s jobs. Ordered by growth rate(%) from highest to lowest they are (1) Administrative Support & Waste Management Services(3.78%), (2) Arts, Entertainment and Recreation( 3.37%), (3) Professional and Technical Services(3.05%), (4) Health Care(3.00%), (5) Construction(2.39%),(6) Food Services, and drinking places(2.28%), (7) Public and Private Education(2.17%), (8) Non-profit Organizations(1.94%), (9) Real Estate and Rental Leasing(1.81%), (10) Transportation and Warehousing(1.58%).

The second category has 9 of the 22 sectors with growth rates less than the national average for 1990 to 2006 and 2006 to 2014. Slow growth rates assure sectors with more jobs, but their slow growth assures they will have a decreasing share of jobs. Ordered by growth rate from highest to lowest they are (1) Finance and Insurance(1.36%), (2) Repair and Maintenance(1.34%), (3) Retail Trade(.94%), (4) Personal and Laundry Services(.86%), (5) Accommodation(.80%), (6) Information Services(.80%), (7) Wholesale Trade(.71%), (8) Government, Excluding Education (.54%), (9) Management of Companies and Enterprises(.51%).


The third category has 3 sectors with negative growth rates for 1990 to 2006 and 2006 to 2014. Negative growth rates mean fewer jobs and necessarily a declining share of non-farm total employment. Ordered by growth rate from highest to lowest or least negative to most negative they are (1) natural resources(-.70%), (2) manufacturing(-1.37%), and (3) Utilities(-1.86%).

top


Background and Discussion by Sector

High Labor Growth Rates
Administrative Support & Waste Management Services
Arts, Entertainment and Recreation
Professional, Scientific and Technical Services
Health Care Services
Construction
Food Service and Drinking Places
Education Services, Private & Public Combined
Non-Profit Organization Services
Real Estate and Rental Leasing
Transportation and Warehousing

Slow Labor Growth Rates
Finance and Insurance Services
Repair and Maintenance Services
Retail Trade
Personal and Laundry Services
Accommodation Services
Information Services
Wholesale Trade
Government, excluding education
Management of Enterprises

Negative Labor Growth Rates
Natural Resources
Manufacturing
Utilities

High Labor Growth Categories

1) Administrative Support & Waste Management Services

Combined administrative support and waste management had 8.374 million jobs in 2006 with a 6.1 percent growth rate. Establishments in this sector sell almost everything they do to other establishments and not to final consumers. Only about 4 percent of the jobs are in waste management and even though jobs there are growing they will only amount to 6 or 7 thousand more jobs a year. The other 96 percent of jobs are in administrative support, which has quite a smorgasbord of services. Include jobs in office administration and facilities support, employment services, but also business services like telephone call centers and document preparation, and others like travel and reservation services, security and investigation services, building and janitorial services. Employment services have the biggest share, nearly 45 percent of the total.

Administrative Support & Waste Management Services has the distinction of having the fastest growth rate for jobs in the 22 sectors: 3.78 percent. The forecasted growth rate from 1990 to 2014 is a more modest 3.51 percent with an expected annual increase of 275 thousand jobs per year. Because administrative and support services has high growth it has a growing share of America’s jobs. Check the forecast table to calculate an increase of 5.951 million jobs. The increase is the difference of 10.576 million jobs in 2014 and 4.625 million jobs in 1990. If job growth in administrative support had been the same as overall job growth for non-farm employment jobs there would be 1.754 million new jobs instead of 5.951 million. Taking the difference gives us 4.197 million new jobs that increase the share of administrative support jobs in non-farm employment. Many of these jobs are replacement jobs for declining manufacturing and 1.836 million of them are in temporary help services. back

2) Arts, Entertainment and Recreation

Establishments in arts, entertainment and recreation had 1.926 million jobs in 2006, which is 1.4 percent of non-farm employment. The arts and entertainment parts of this sector has art and entertainment put on by theatre and dance companies, orchestras, music groups, sports teams, sports promoters, racetracks, and independent artists, writers, or performers. Include museums, zoos, nature parks, botanical gardens and historical sites where there is looking rather than live entertainment. The recreation part of this sector has recreation at amusement parks, arcades, gambling casinos, golf courses, ski resorts, marinas, fitness centers, sports centers, ice rinks, swimming pools, bowling alleys, billiard parlors, day camps, riding stables and a few more. The arts and entertainment part has a little over 522 thousand jobs; the recreation part 1.4 million. Fitness centers are by far the largest employer here with over 500 thousand jobs. Golf courses and country clubs are next with 344 thousand jobs in 2006. Casino gambling jobs do not include jobs at casino gambling hotels, those jobs are in accommodations. However, gambling as a drop in recreation has 137 thousand jobs and a higher growth rate than any other part of recreation, averaging above 9 percent a year starting in 1990.

Arts, entertainment and recreation services sector has fast growth from the forecast table, actually second fastest growth with an annual rate of 3.37 percent since 1990. Check the forecast table to calculate 1.225 million new jobs, which is the difference of 2.360 million jobs in 2014 and 1.133 million jobs in 1990. If job growth in arts, entertainment and recreation services equaled the growth rate for non-farm employment there would be only 430 thousand new jobs instead of 1.227 million. Taking the difference of 1.227 million from 430 thousand equals 797 thousand of the new jobs that increase the share of arts, entertainment and recreation jobs in non-farm employment. back


3) Professional, Scientific and Technical Services

Professional, Scientific and Technical Services had 7.371 million jobs in 2006 and 5.4 percent of non-farm jobs. It has “establishments that specialize in performing professional, scientific and technical activities for others.” That comes directly from the North American Industry Classification Manual. The manual goes on to explain that establishments in this sector use processes where human capital is the major input. “Establishments rely on employee skills and knowledge to deliver expertise to clients.” Computer system design and related services is the biggest of the service sectors here with almost 1.278 million jobs out of 7.371 million jobs reported in the forecast table. Legal services are next with about 1.173 million jobs followed by management and technical consulting services, accounting and related services, engineering services, scientific development and research services, advertising and related services, public relations services, architectural services, veterinary services, interior and graphic design services.

Most of the professional occupations that require specialized degree training have employment somewhere among these services. Include lawyers, engineers, architects, accountants, graphic designers, veterinarians. With research services in this sector there are also jobs for chemists, physicists, epidemiologists and a few more. Most of the services and the occupations that go with them continue to increase faster than the non-farm average. Because the manufacturing sector uses many engineers and manufacturing jobs are in decline, some of the growth in engineering jobs in this sector is net of losses in manufacturing.

Professional, Scientific and Technical services has the third highest job growth from the forecast table with a yearly average growth in jobs of 3.05 percent. Check the forecast table to calculate 4.226 million new jobs, which is the difference of 8.783 million jobs in 2014 and 4.557 million jobs in 1990. If job growth in professional, scientific and technical services equaled the growth rate for non-farm employment jobs there would be only 1.728 million new jobs instead of 4.226 million. Taking the difference gives 2.498 million of the new jobs that increase the share of these jobs in non-farm employment. back

4) Health Care Services

Establishments in the health care have 14.9 million jobs in 2006, nearly 11 percent of non-farm employment. It has jobs divided among four health care sub-sectors: ambulatory care, hospital care, nursing and residential care and social assistance. The biggest share of the jobs, more than 35 percent, classify as ambulatory care in offices of physicians, outpatient care centers, lab services and home health services. Hospitals are next with nearly 30 percent of jobs although ambulatory health care continues to grow faster than hospital employment. Nursing and residential care have around 20 percent of jobs. Fourth and last, there is social assistance which has 2.3 million jobs. However, 806 thousand of these jobs are in child day care centers, which the North American Industry Classification Committee decided to put in the health care sector. Other establishments in social assistance have jobs in family assistance services, community, emergency, relief and rehabilitation services. The sub-sector employs many social workers and counselors.

Health care in all four sub-sectors has the fourth highest job growth from the forecast table with a yearly average growth in jobs of 3.00 percent. Check the forecast table to calculate an increase of 8.280 million jobs, which is the difference of 17.575 million jobs in 2014 and 9.295 million jobs in 1990. If job growth in health care equaled overall job growth for non-farm employment jobs there would be 3.525 million new jobs instead of 8.280 million. Taking the difference gives 4.755 million of the new jobs that increase the share of health care jobs in non-farm employment. back

5) Construction

Establishments in construction had 7.69 million jobs in 2006 with 5.9 percent of non-farm employment. Construction has jobs in three sub sectors, building construction, construction in civil engineering, especially highways, streets, bridges, utility and water-sewer systems and a third sub sector, specialty trade contractors. Building construction has 1.8 million jobs with a little over 1 million of the jobs in residential construction. Around 63 percent or 4.9 million of the jobs are in specialty trades, which are electric, plumbing, roofing, masonry and the building trades. These jobs support other construction but mostly in residential construction.

Construction has the fifth highest job growth from the forecast table with a yearly average growth in jobs of 2.39 percent. It is the only sector in goods production that we can count on for new jobs. Check the forecast table to calculate 3.569 million new jobs, which is the difference of 8.834 million jobs in 2014 and 5.266 million jobs in 1990. If job growth in construction equaled overall job growth for non-farm employment jobs there would be 1.997 million new jobs instead of 3.569 million. Taking the difference tells us 1.572 million of the new jobs increase the share of construction jobs in non-farm employment. back

6) Food Service and Drinking Places

Establishments primarily engaged in preparing food to order for immediate consumption go in this sector as full and limited service restaurants. They had 9.379 million jobs in 2006 with 6.9 percent of non-farm employment. Full and limited service restaurants are just one part of food services, which includes a long list of cafeterias, pizza delivery, snack bars, takeout, catering, ice cream parlors, and beverage bars. These are not all the jobs in restaurants just restaurants. Jobs at restaurants attached to hotels, motels or other accommodations are counted there. Accommodations, as you will see below, have only 1.8 million jobs so most of the restaurant jobs are here.

Food Service and Drinking places have the 6th highest job growth from the forecast table with a yearly average growth in jobs of 2.28 percent. Check the forecast table to calculate 3.954 million new jobs, which is the difference of 10.493 million jobs in 2014 and 6.539 million jobs in 1990. If job growth in food services equaled overall job growth for non-farm employment jobs there would be 2.480 million new jobs instead of 3.954 million jobs. Taking the difference means 1.475 million of the new jobs increase the share of food service jobs in non-farm employment. back

7) Education Services, Private & Public Combined

Educational services had 13.149 million jobs in 2006 with 9.7 percent of non-farm employment. The job total has both public and private schools including colleges, universities and junior colleges. Local governments dominate education employment with the biggest block of education jobs, more than double private education. Also include trade schools and other specialty training in language, fine arts and sports. Other supporting educational services bring in jobs in testing, tutoring, and consulting.

Educational Services has the seventh highest job growth from the forecast table with a yearly average growth in jobs of 2.17 percent. Check the forecast table to calculate 5.779 million new jobs, which is the difference of 15.099 million jobs in 2014 and 9.320 million jobs in 1990. If job growth in education services equaled overall job growth for non-farm employment jobs there would be 2.245 million new jobs instead of 5.779 million. Taking the difference gives us 3.534 million new jobs that increase the share of education service jobs in non-farm employment. back

8) Non-Profit Organization Services

Non-Profits had 2.900 million jobs in 2006 with 2.13 percent of non-farm employment. Non-profits have religion among other groups in Grant Making and Giving services, giving away money to worthy applicants, or Social Advocacy Organizations promoting causes like wildlife preservation and birth control, or Civic and Social Organizations like scouting, fraternal lodges, or social clubs promoting the civic and social interests of members, and finally Business, Professional, Labor, Political and Similar Organizations like the Chamber of Commerce, International Brotherhood of Teamsters and State and Federal Bar Associations. Include PAC’s here.

Non-Profit Organizations have the eighth highest job growth from the forecast table with a yearly average growth in jobs of 1.94 percent. Check the forecast table to calculate 1.265 million new jobs equal to the difference of 3.397 million jobs in 2014 and 2.132 million jobs in 1990. If job growth in non-profit services equaled overall job growth for non-farm employment jobs there would be 809 thousand new jobs instead of 1.265 million. Taking the difference tells us 456 thousand of the new jobs increase the share of non-profit service jobs in non-farm employment. back

9) Real Estate and Rental Leasing

Real estate and rental leasing had 2.180 million jobs in 2006 with 1.6 percent of non-farm employment. Establishments in real estate did not get its own sector in the North American Industry Classification System. Instead it is a sub-sector within a bigger sector that includes rental and leasing establishments that rent or lease cars, trucks, RV’s, appliances, formal ware, costume ware, videos, health equipment, commercial machinery or equipment, or just about anything you can imagine.

The real estate sub-sector has 1.5 million jobs where establishments sell, buy or rent real estate through agents or brokers but also all other establishments that rent, lease or management real estate for others. A small part of asset leasing has establishments that lease patents, trade marks and franchise agreements, but it has only 29 thousand jobs.

Real Estate and Rental Leasing have the ninth highest job growth from the forecast table with a yearly average growth in jobs of 1.81 percent. Check the forecast table to calculate 811 thousand new jobs, which is the difference of 2.446 million jobs in 2014 and 1.635 million jobs in 1990. If job growth in real estate and rental leasing services equaled overall job growth for non-farm employment jobs there would be 620 thousand new jobs instead of 811 thousand. Taking the difference gives us 191 thousand new jobs that increase the share of real estate and rental leasing service jobs in non-farm employment. back

10) Transportation and Warehousing

Transportation and warehousing services had 4.465 million jobs in 2006 with 3.28 percent of non-farm employment. Establishments hauling freight and moving passengers in modal transportation have 2.6 million of the jobs as part of air, rail, water, pipeline, truck, bus, taxi, and limousines services. Truck transportation firms have 1.4 million of these jobs, more than half of modal transportation employment. Include transportation support services, couriers and messenger services and warehouse and storage firms, which have another 1.819 million jobs as part of the transportation sector. Support activities defy easy description, but employ 571 thousand in jobs providing services for port, terminal and harbor operations and airports with work in loading, unloading, navigation, logistics, packing, crating, and towing, but very little transporting.

Transportation and warehousing services have the tenth highest job growth from the forecast table with a yearly average growth in jobs of 1.58 percent. Check the forecast table to calculate 1.485 million new jobs, which is the difference of 4.961 million jobs in 2014 and 3.476 million jobs in 1990. If job growth in transportation and warehousing services equaled overall job growth for non-farm employment jobs there would be 1.318 million new jobs instead of 1.485 million. Taking the difference tells us 166 thousand of the new jobs will increase the share of transportation and warehousing services jobs in non-farm employment. back

top

Slow Growth Categories

1) Finance and Insurance Services

Finance and insurance services had 6.183 million jobs in 2006 with 4.54 percent of non-farm employment. Finance and insurance has establishments that accept deposits and make loans. These were formerly known as banks, savings and loan and credit unions, but in the North American Industry Classification these and a few others like credit card issuers, consumer lenders, and real estate credit firms are known as Credit Intermediaries. Credit Intermediaries had 2.936 million jobs in 2006, or 47 percent of the total of 6.183 million finance and insurance jobs in 2006. Next are 817 thousand jobs in establishments that buy and sell someone else’s stocks and bonds for a fee or commission: stock brokers and investment bankers. Include 2.315 million jobs in a third sub sector: insurance carriers. Finally there are establishments that manage funds and trusts: pension funds, mutual funds, but with only 93 thousand jobs. Money is so complicated.

Finance and insurance has slow growth, but just .01 percent below the non-farm average from the forecast table with yearly average growth in jobs of 1.36 percent. Check the forecast table to calculate 1.751 million new jobs, which is the difference of 6.730 million jobs in 2014 and 4.979 million jobs in 1990. If job growth in finance and insurance services equaled the growth rate for non-farm employment there would be 1.888 million new jobs instead of 1.791 million. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of finance and insurance services jobs. Finance and insurance needed 137 thousand more new jobs to keep its share of non-farm employment. back

2) Repair and Maintenance Services

Establishments in repair and maintenance services had 1.248 million jobs in 2006, but the majority of jobs are repairing cars and trucks. America has nearly 900 thousand people fixing cars, or if you notice at the DMV they called them vehicles. That total includes 150 thousand employed at car washes along with jobs at repair shops, bump shops and auto glass replacement. Car crashes reduce our well-being but create jobs and production adding to the gross domestic product.

The rest of repair and maintenance has 361 thousand jobs at establishments fixing or maintaining commercial machinery and electronic equipment or fixing household goods. Almost 180 thousand fix commercial machinery and another 104 thousand fix electronic and electronics equipment, especially computers. Establishments doing household repairs for lawnmowers, appliances, shoe repair, watch repair, upholstery and a few more have around 78 thousand jobs.

Repair and maintenance services has slow growth but just a few hundredths below the non-farm average from the forecast table with yearly average growth in jobs of 1.34 percent. Check the forecast table to calculate 439 thousand new jobs, which is the difference of 1.448 million jobs in 2014 and 1.009 million jobs in 1990. If job growth in repair and maintenance services equaled overall job growth for non-farm employment there would be 383 thousand new jobs instead of 439 thousand. Taking the difference gives us a gain of 56 thousand new jobs. Even though repair and maintenance has been growing just below the non-farm average between 1990 and 2006, its growth rate is forecast to be above the non-farm growth rate so it will gain a small share of non-farm jobs for 2014. back

3) Retail Trade

Retail trade had 15.321million jobs in 2006 with 11.25 percent of non-farm employment. Retail establishments sell goods to final consumers classified in 12 retail sub sectors. General merchandise stores have the most jobs, 2.9 million. General merchandise includes department stores, warehouse stores and super centers. Food and Beverages stores follow closely with 2.8 million jobs. Together they have 37 percent of retail jobs. Motor vehicle and parts dealers has third place with 1.9 million jobs. Among the remaining nine sub-sectors only Building Material and Garden Supply stores and Clothing Stores have more than a million jobs. Furniture and home furnishings, electronic and appliance stores, health and personal care stores, gasoline stations, sport, hobby and music stores, pet supply stores, and non-store retailers round out the sub sectors.

Retail trade has slow job growth from the forecast table with a yearly average growth in jobs of .94 percent. Check the forecast table and calculate 3.706 million new jobs, which is the difference of 16.889 million jobs in 2014 and 13.183 million jobs in 1990. If job growth in retail trade equaled overall job growth for non-farm employment there would be 4.999 million new jobs instead of the 3.709 million. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of retail services jobs. Retail trade needed 1.293 million more new jobs to keep its share of non-farm employment. back

4) Personal and Laundry Services

Personal and Laundry services had 1.3 million jobs in 2006, which was just below one percent of non-farm establishment employment. The personal services part has most of the jobs, almost a million. Barber shops and beauty salons have 475 of these jobs but the other jobs in other personal services include massage parlors, tattoo parlors, tanning salons, weight loss centers, death care, pet care services, photo finishing, parking lots, dating services, wedding planning, bail bonding and a few more, but you get the picture. Most of these personal services are growing faster than the non-farm average, especially parking lots and pet care. However, laundry services, which have dry cleaning, coin operated laundries and linen services have decreasing employment so the net increase keeps the total increase at modest rates.

Personal and Laundry services has slow job growth from the forecast table with a yearly average growth in jobs of .86 percent. Check the forecast table to calculate 273 thousand new jobs, which is the difference of 1.396 million jobs in 2014 and 1.120 million jobs in 1990. If job growth in personal and laundry services equaled the rate of growth for non-farm jobs there would be 425 thousand new jobs instead of 273 thousand. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of personal and laundry service jobs. Personal and Laundry services needed 152 thousand more new jobs to keep its share of non-farm employment. back

5) Accommodation Services

Establishments in accommodation had 1.834 million jobs in 2006. The accommodation in the accommodation and Food services sector has traveler accommodations, not residential accommodation. Include hotels, motels, bed and breakfast inns, casino hotels, RV parks and campgrounds. The NAICS committee decided to put economic activity and jobs for rooming and boarding houses here. Rooming and Boarding houses include dormitories, fraternity and sorority houses, even though rooms at these establishments amount to transient housing in between travel and residential living. Residential Advisor has 56 thousand jobs nationwide with lots of those jobs at college dorms and fraternity and sorority houses.

Accommodation has slow job growth from the forecast table with a yearly average growth in jobs of .80 percent. Check the forecast table to calculate 389 thousand new jobs, which is the difference of 2.004 million jobs in 2014 and 1.615 million jobs in 1990. If job growth in accommodation services equaled the rate of growth for non-farm jobs there would be 613 thousand new jobs instead of 389 thousand. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of accommodation jobs. Accommodation services needed 224 thousand more new jobs to keep its share of non-farm employment. back

6) Information Services

Information services had 3.054 million jobs in 2006, which is 2.24 percent of non-farm establishment employment. Information Services attempts to include all the establishments that produce, distribute or transmit information or cultural products. Establishments publishing books, magazines, newspapers, films, sound recordings or producing television and radio programming are included here so there are jobs as announcers, reporters, analysts, writers and editors. Film and sound recording establishments include jobs as producers, directors, actors, musicians and artists. Establishments that distribute and transmit information include a variety of telecommunications: phone service, cellular, paging, cable, satellite, Internet Service, web search firms, and libraries. These establishments tend to own, operate, and maintain facilities.

Information services has slow job growth from the forecast table with a yearly average growth in jobs of .80 percent. Check the forecast table to calculate 550 thousand new jobs, which is the difference of 3.238 million jobs in 2014 and 2.688 million jobs in 1990. If job growth in information services equaled the rate of growth for non-farm employment jobs there would be 1.019 million new jobs instead of 550 thousand. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of information services jobs. Information services needed 470 thousand more new jobs to keep its share of non-farm employment. back

7) Wholesale Trade

Wholesale trade had 5.897 million jobs in 2006, which was 4.3 percent of non-farm employment. Wholesale establishments sell or arrange the sale of goods for resale, or sell or arrange the sale of raw materials or production supplies and equipment. Wholesale trade includes establishments that supply retail outlets, but wholesale jobs result from selling supplies, materials and equipment to industrial or construction firms and selling supplies, materials and equipment to offices, hospitals, and clinics.

Wholesale trade has slow job growth from the forecast table with a yearly average growth in jobs of .71 percent. Check the forecast table to calculate 975 thousand new jobs, which is the difference of 6.244 million jobs in 2014 and 5.268 million jobs in 1990. If job growth in wholesale trade equaled the rate of growth for non-farm jobs there would be 1.998 million new jobs instead of 975 thousand. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of wholesale jobs. Wholesale trade needed 1.022 million more new jobs to keep its share of non-farm employment. back

8) Government, excluding education

Government Service, excluding education had 11.757million jobs in 2006, which was 8.6 percent of non-farm employment. Government excluding education is mostly, although not entirely, jobs in public administration for the federal, state, and local government. Public administration includes office work for executive offices, legislative bodies, and judicial and corrections administration. Jobs for parks and recreation, museums, social services, public health and other things besides office work go into the total that equals 11.757 million jobs.

Government Service, excluding education has slow job growth from the forecast table with a yearly average growth in jobs of .54 percent. Check the forecast table to calculate 1.711 million new jobs, which is the difference of 12.493 million jobs in 2014 and 10.782 million jobs in 1990. If job growth in government service, excluding education equaled the rate of growth for non-farm jobs there would be 2.378 million new jobs instead of 1.711 million. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of government service, excluding education jobs. Government Service, excluding education needed 667 thousand more new jobs to keep its share of non-farm employment. back

9) Management of Enterprises

Management of Enterprises had 1.809 million jobs in 2006, which was 1.3 percent of non-farm employment. Defining a management sector results from the emphasis on reporting data and information at the establishment level. A firm can have many establishments scattered around at different locations where some establishments within the larger firm might be just head offices or administrative offices. Other establishments might be doing the firm’s productive work with some management, but establishments primarily engaged in managing get their own sector. Over 90 percent of employment in this sector is in establishments that only administer, oversee or manage other establishments, or do the administrative work for establishments that actually do something like manufacture products or provide services. The remaining few percent of jobs in this sector are at holding companies that own the stocks of one or more other companies in order to control them.

Management of Enterprises has slow job growth from the forecast table with a yearly average growth in jobs of .51 percent. Check the forecast table to calculate 176 thousand new jobs, which is the difference of 1.843 million jobs in 2014 and 1.667 million jobs in 1990. If job growth in management of enterprises equaled the rate of growth for non-farm jobs there would be 632 thousand new jobs instead of 176 thousand. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of management of enterprises jobs. Management of Enterprises needed 457 thousand more new jobs to keep its share of non-farm employment. back

top

Negative Labor Growth Rates

1) Natural Resources

Establishments in natural resources had 684 thousand jobs in 2006, down from 765 thousand in 1990. Natural resources includes logging and mining, where mining operations have oil and gas extraction, coal mining, metallic and nonmetallic ore mining. Establishments with jobs that provide support activities go here. Natural resources have only .5 percent of non-farm establishment employment in 2006.

Natural resources have job declines and negative growth from the forecast table with a yearly average rate of decline in jobs of -.69 percent. Check the forecast table to calculate a decline of 209 thousand jobs, which is the difference of 556 thousand jobs in 2014 and 765 thousand jobs in 1990. If job growth in natural resources equaled the rate of growth for non-farm jobs there would be 290 thousand new jobs instead of a decline of 209 thousand old jobs. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of natural resources jobs. Natural resources needed 499 thousand new jobs to keep its share of non-farm employment. back

2) Manufacturing

Establishments in manufacturing had 14.201 million jobs in 2006, which is 10.4 percent of non-farm establishment employment. Manufacturing in the North American Industry Classification System has establishments that do mechanical, physical, or chemical transformation of materials, substances or components into new products. Transform can be with power driven machinery or hand equipment. Those employed by the manufacturing establishment to do selling are also included. Materials, substances, or components transformed can be raw materials of agriculture, forestry, fishing, mining, quarrying or the products of other manufacturers. Manufacturing is sub divided into 21 sub sectors based on the production equipment, processes of production and job skills with 10 of these sub sectors in durable goods and 11 in non-durable goods. Durable goods generally have a life expectancy of longer than one year.

Manufacturing has job declines and negative growth from the forecast table with a yearly average rate of decline in jobs of -1.37 percent. Check the forecast table to calculate the decline of 4.394 million jobs, which is the difference of 13.301 million jobs in 2014 and 17.695 million jobs in 1990. If job growth in manufacturing equaled the rate of growth for non-farm jobs there would be 6.710 million new jobs instead of a decline 4.394 million old jobs. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of manufacturing jobs. Manufacturing needed 11.105 million new jobs to keep its share of non-farm employment. back

3) Utilities

Utility services has 2006 employment of 548 thousand, which is .4 percent of non-farm employment and down from 740 thousand in 1990. In the North American Industry Classification utility services includes electricity, natural gas, water and sewerage services. Electricity includes generation, transmission and distribution, but natural gas is just distribution and resale. Water and sewer systems can also include treatment and irrigation. Electricity employment makes up over 70 percent of this total, about 20 percent in natural gas and just fewer than 10 percent for water and sewers. It does not include waste removal services. They are included in administrative and support services.

Utility services have job declines and negative growth from the forecast table with a yearly average rate of decline in jobs of -1.86 percent. Check the forecast table to calculate a decline of 224 thousand jobs, which is the difference of 516 thousand jobs in 2014 and 740 thousand jobs in 1990. If job growth in utility services equaled the rate of growth for non-farm jobs from 1990 to 2014 there would be 281 thousand new jobs instead of a loss of 224 thousand old jobs. Taking the difference equals the number of new jobs required to prevent a percentage decrease in the share of utility services jobs. Utility services needed 505 thousand new jobs to keep its share of non-farm employment. back

top

Read More