Thursday, April 5, 2007

Service Jobs - America’s Service Economy

Introduction -- revised for 2012 data

The Bureau of Labor Statistics (BLS) reports industry data by North American Industry Classification (NAICS) and occupational data by the Standard Occupational Classifications (SOC). The connection between employment by industry and employment by occupation is maintained with BLS staffing patterns, i.e. what percentage of an industry’s employment uses this or that occupation.

Maintaining employment data by industry and by occupation allows a break down of new jobs in a two-step process. The first step breaks out jobs by industry. For example, the manufacturing industry has declining total employment. Job losses in manufacturing eliminate jobs, but especially jobs peculiar to manufacturing like engineers, machinists and tool and die makers. These jobs will decline more than other jobs because manufacturing uses a disproportionately large share of these occupations.

The second step breaks out industry jobs by occupation. For example, engineers have jobs in manufacturing, but other industries like construction and utilities also employ engineers. If these industries have increasing employment then some of the engineers leaving the manufacturing industry will find jobs in the construction or utility industries. In contrast flight attendants have few other opportunities to be flight attendants outside the air transportation industry. If the air transportation industry has fewer jobs, then flight attendants will have to find other occupations in other industries. If we want to know what happens to people losing jobs when their industries decline, we can follow the path of jobs by industry and then to occupations.

Total employment needs to grow as the population grows in order for Americans to find jobs and support themselves. Total employment at establishments had a monthly average of 133.7 million in 2012, which are 24.2 million more jobs than 1990 when establishment employment totaled 109.5 million. Establishments are individual places with a separate address. In this way an establishment is also a firm if it has one location. For firms with two or more locations data is reported from its separate establishments.

The first and broadest breakdown of establishment employment splits jobs between goods-producing and service providing. Goods-producing industries include mining along with logging and natural resources, construction and manufacturing. Service providing has everything else including government. Good production is 18.4 million jobs, but only 13.8 percent of establishment jobs, while service production has 115.3 million jobs with 86.2 percent of employment.

The service industry is frequently used as a generic term in the popular press. Since manufacturing employment drops year after year, down 5.8 million from 1990 with an ever smaller share of jobs, articles discussing the demise of manufacturing employment are common news stories. Often near the end of the story the depressing tone of the article is transformed with "But jobs are expanding in service industries.” Service employment is offered as a savior for the unemployed and the down and out. Since Americans require jobs to survive we better hope this idea is correct. So far it is correct; America is inventing new jobs all the time. However, service industry and service industry employment are not generic terms. With the new jobs there is new data to go with the new categories. What we are doing in these ever growing service industries can be described in clear detail. We have 115.3 million services jobs to divvy up. Wow! Give us service.

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