Wednesday, February 13, 2008

Do You Want Morphine With That?

It's quite clear that as manufacturing jobs disappear, they are being replaced with service jobs. Really this is only a half-truth; professional and related occupations are increasing at the same rate as the service sector (17%) and each have about the same number of workers (just shy of five million).

Most people bemoan the growth of services. When they think of "service sector" they think of waiting tables and stocking shelves. And yes, in absolute terms most of the new jobs in the next ten years are likely to be in retail.

But the absolute numbers don't really matter; the growth rates do. Suppose we see 1000 jobs added in a high wage sector and 1000 added in a low wage sector. You might think the two are keeping in perfect step with each other. But suppose the former had 10,000 to begin with and the latter had 100,000. Now it's a 10% increase versus just 1%. Percents are much more useful because they show us the trend of employment. Is America heading to a high-wage service sector or a low-wage service sector. These projected numbers from the BLS (2006-2016) have the answer.

25% Health care and social assistance
23% Professional and business services
14% Financial activities
14% Leisure and hospitality
13% Other services
11% Educational services
10% Construction
9% Transportation and utilities
8% State and local government (except hospitals and education)
7% Information
5% Retail

Just because your most common exposure to the service sector is retail doesn't mean that's what is seeing the most growth. Guess we all won't work for Wal-Mart after all.

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