Wednesday, December 12, 2007

Service Jobs - Trade and Rental Leasing

Trade and Rental and Leasing Services

Retail trade, wholesale trade and rental and leasing services are defined separately in NAICS with data reported in their own sub sector. Retail establishments sell goods to final consumers. 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. Rental establishments rent or lease cars, trucks, RV’s, appliances, formal ware, costume ware, videos, health equipment, commercial machinery or industrial equipment, or just about anything you can imagine.

Combined jobs for the three services equal 21.1 million in 2012, a combination of jobs as big as all government service. Retail has 14.87 million jobs spread among 12 sub sectors; wholesale 5.67 million. Jobs in rental and leasing are 510 thousand with automobile, truck and RV rentals accounting for 173.3 thousand of those jobs.

Combined wholesale and retail trade have growing employment but at a 22 year growth rate of .49 percent, below .91 percent rate for total employment, which causes a decreasing percentage of wholesale and retail jobs in total employment. Using computer technology in trade, especially for barcodes and inventory management increases labor productivity. Retail and wholesale sales volumes per work hour are up and sometimes at rates comparable to productivity in manufacturing. Higher productivity in trade limits job growth, but so far not enough to decrease employment like it has in manufacturing.

Job growth and productivity depends on the type of service. Jobs at gasoline stations have dropped 70 thousand since 1990 with 841 thousand jobs in 2012. Food and beverage store employment, which is almost 90 percent grocery store employment, has leveled off at 2.86 million, jobs about the same as 1990. Salesmanship is not important for these products.

However, at furniture stores, electronics stores and clothing stores sales depend more on salesmanship. Buyers may need to learn about available products and how they work, or the different product brands, or be told something fits right and looks great before they make up their mind. Explaining and selling take time and so more jobs are needed at furniture stores, electronic stores, and clothing stores.

For a slow growth sector some of the fastest retail job growth is coming at warehouse clubs and super centers and in used goods: consignment stores, Goodwill, the Salvation Army and flea markets. Employment at warehouse clubs and super centers is growing much faster than jobs at more specialized retail like clothing stores, home furnishing stores, appliance stores, paint stores, hardware stores. Job growth data suggests warehouse clubs and super centers are replacing smaller more specialized retail.

Growth in jobs selling used goods continued during the recession that raised used goods employment to 146.3 thousand jobs at an annual growth rate of 4.50 percent. Job growth at used car dealers averaged 3.36 percent a year since 1990 but only .2 percent at new car dealers, although new car dealers continue to have much larger employment.

Retail sales on Main Street or at the mall or shopping center support local employment because people do not drive long distances to shop. Even though many shop while traveling or on vacation, shopping at stores away from home has minimal effect on retail employment. In 2012 retail jobs have 11.1 percent of national establishment employment. For the last 50 years monthly retail employment averaged 11.26 percent of establishment employment. The low was 10.02 percent in 1956; the high was 12.21 percent in 1986, but now its 11.1 percent. Change comes slowly.

Employment data by state or metropolitan area tells the same story. The percent of retail jobs by state cluster tightly around the 11.25 percent average and the percent variation above and below that total is the smallest of any sector employment, usually less than a percent above or below. The best bet to forecast retail employment for a state is to take 11.25 percent of total establishment employment. Because retail jobs remain at roughly the same percentage of total employment the only way to have more retailing jobs is to have a bigger population to serve. For anyone in local government or the Chamber of Commerce who wants to boast local employment by luring in a big national retailer, the plan will not work. Before much time goes by the new retailer displaces existing retail jobs and its back to 11 or 12 percent.

Not many jobs outside of management need college degree skills in wholesale and retail trade or rental services. In wholesale sales representatives for scientific and technical products and sales engineers requires BA degree skills in the BLS skills taxonomy. Sales Engineer, also known as manufacturer’s agent, often requires an engineering degree to explain and sell a particular technical product or line of products. Sales representatives for technical products had almost 214 thousand jobs in 2012, sales engineer another 23.7 thousand.

In retail, 65 percent of pharmacists work in retail establishments, about 181 thousand jobs from drug stores to grocery stores. A few optometrists now work in retail as part of selling glasses in combination with opticians. Trade does have 88.2 thousand jobs in design: floral design, interior design, graphic design, and merchandise displayers.

Retail trade employs 93.5 percent of 4.06 million jobs as Retail Salesperson, which also has more jobs than any other American occupation; Another 1.1 million jobs are sales managers who manage area sales workers with slightly over 1 million of their jobs in trade.

Cashier holds second place with 3.31 million jobs and over 82 percent of those in trade. Cashiers jobs are not the same as retail salespersons. Cashiers run a cash register, take money and make change but they seldom do selling as the term describes the work of Retail Salesperson.

Electronic shopping over the Internet and electronic auctions are growing at 5.35 percent a year, a very rapid pasce, but still only 275.1 thousand jobs nationwide. Electronic shopping has the potential to break the link between retail jobs and the population it serves. To discourage electronic shopping mall designers and owners make sure malls have more than shopping; they have restaurants, fountains, benches, movie theatres, ice rinks and health clubs. Making shopping a pleasant social experience apparently works because there is little sign of any big change in America’s shopping habits.

If America takes up electronic shopping in a big way many will pay a visit to the unemployment office. Electronic shopping establishments need a higher percentage of Shipping, Receiving and Traffic Clerks and Customer Service Representatives, but precious few Retail Salespersons. Talking and selling creates the jobs and there is not much talking on the Internet.

With a 115.3 million service jobs to divvy up, trade services and rental and leasing services gives us 21.1 million jobs, which is the biggest share of jobs at 15.7 percent of establishment employment. Combining retail, wholesale, and rental and leasing jobs amounts to the jobs that support America’s shopping. Unfortunately, they have slow growth. These services are unique among services because they have such a high share of jobs, but their slow growth guarantees they will decline as a share of U.S. employment. America shops, but not enough to keep America employed. Americans must buy more services. We have 31.7 million service jobs left to fill. Give us service.


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