Weakness in the US labour market persists into the 4th year of the recession with the most intense sectoral shift hitting manufacturers. The gradual decline in the manufacturing share of GDP continues a decades-long trend which has accelerated since 2008. Out of 12.6 million production jobs in 1999, 4.4 million jobs were lost by 2010 so there is no doubt about the severity of the structural shift.
A common feature of recessionary job losses is the claim that low paying service sector jobs replace high paying factory jobs. That is, burger flipping McJobs instead of unionized and skilled work. In addition to the recession, this sounds like what we would expect given the rise of China and increasing globalization. It seems reasonable to think that importing manufactured goods would leave fewer jobs, and that those would be of lower value; we should also be able to find out how many workers have been affected in this way.
There are many complaints about the way un-employment figures are generated. These are focused on stringent definitions of job seekers that end up creating an overly rosy view of the labour market. Since un-employment figures can be misleading, I have compiled Employment data for every job category from the US Bureau of Labor Statistics.
The most recent data is from 2010, well into the recession, while the earliest data of the same classification system is from 1999. (Of course the downside of using employment data is that people will complain about ignoring population growth; there is no avoiding that, but it is still worth looking at this half of the story).
The idea is to address one specific question: how many high paying jobs were lost and replaced by low paying jobs? To do this, I listed the major job categories and ranked them by their 1999 pay level. Then I divided the total 1999 workforce into 2 segments of equal size, high pay and low pay. Finally, I counted the number of jobs in each of the 2 segments in 2010. This gives the number of jobs gained or lost in each pay segment. (please see the table below to help visualize the strategy)
The Results
Production job wages ranked nearly centred between the high and low halves of the workforce. The surprise here was that the production category is not in the high paying half of the workforce. Instead, it is ranked second in the lower wage segment, just below the “protective service” category that includes police officers, prison guards and firefighters.
It seems that the high pay of production jobs is at least partly a myth, while the popular image of low paying food service jobs is confirmed by its last ranked position in the list. The 11 million food service jobs are indeed low paying service sector jobs. But as a counter-balance, the 11 million service sector jobs in engineering, computers and business are high paying.
Out of approximately 127 million jobs in 1999, the total change by 2010 was a loss of 176, 840 jobs ( 0.14 %). But instead of the expected decline in higher wage jobs, the exact opposite occurred. More than 1.6 million low wage jobs were lost, and more than 1.4 million high wage jobs were added.
Production jobs showed the largest absolute loss of any category at nearly 4.4 million. More surprisingly, the next largest job category change in was in management with a loss of just over 2 million. This includes a 54% loss of CEO positions and a 66% loss of advertising management jobs.
As a proportion of total jobs in each category, production workers and managers lost the same amount, 25% since 1999.
As a proportion of total jobs in each category, production workers and managers lost the same amount, 25% since 1999.
The biggest job gaining areas in the high paying category were business & financial operations, and health care practitioners.
Below is the categorized jobs data.
Source: table derived from http://www.bls.gov/oes/oes_dl.htm
accessed 25 March 2012
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