On July 11th the Wall Street Journal published an article entitled “U.S. Consumers Trade Down as Economic Angst Grows.” The article described Americans saving money by choosing less expensive brands and models of products. Wholesalers and retailers are cutting back offerings of designer brands for the less expensive “plain Jane” products.
The article concentrated on products but had almost nothing to say about services. If Americans just cut back on designer brands job losses should be moderate. If America cuts back on services, unemployment will spike upwards. That is because even though establishment employment went down by 438 thousand jobs from December 2007, there is a net increase in service jobs.
Construction and manufacturing were the big losers: off more than 500 thousand jobs since December 2007. Retail trade and temporary help services were the big losers in services, which were down more the 300 thousand jobs. Telecommunications, finance, and real estate were down as well. Declining industries lost 990.5 thousand jobs so that a net decrease of 438 thousand jobs includes an increase of 552.5 thousand other jobs, all of them service jobs.
For example, new government service jobs replaced 81.5 thousand of the 990.5 thousand jobs not including 44.5 thousand new jobs in public education and 68.5 thousand new jobs in private educational services. Government taxing, borrowing and spending is helping moderate job losses.
Despite the general decline of employment, jobs in leisure and hospitality went up 88.8 thousand from December 2007 to June 2008. Restaurants are the biggest employer in leisure and hospitality with 9.8 million jobs and nearly 78 thousand new jobs since December 2007.
Cooking can be a do it yourself service, even though we go out more and more with restaurant jobs up 740 thousand since 2005. Eating out and paying others to cook helps moderate job losses.
Other jobs in leisure pursuits are trending up faster than the national average and replacing manufacturing jobs. Combine spectator sports, amusement parks, golf and country clubs, fitness centers and gambling where jobs are up to 1.85 million nationwide.
The economic angst mentioned in the Wall Street Journal has not spread to health care services, which continue to increase, up 194 thousand jobs since December 2007. Health care and social service jobs have increased every year since 1990.
Maybe the Wall Street Journal is right and more people are opting for less expensive brands, but it is trivial matter compared to America’s growing reliance on services jobs. Government, restaurant, leisure and health care jobs go up in good times and bad. If any of them start to fall that is the time to worry.
Friday, July 18, 2008
Tuesday, July 15, 2008
America's Job Market Free-for-All
America’s Job Market Free-for-All
Americans should know more about their jobs. When we open our newspapers these sad Sunday mornings and read stories about Circuit City firings, plant closings and jobs moving to Bangalore, it is understandable that many think about job losses, but that is a mistake. America has job losses, but a bigger problem is the new jobs we are taking rather than the old jobs we are losing.
Many know America has fewer manufacturing jobs and more service jobs, but the service industry is frequently described in generic terms in the popular media. There will be an article discussing the demise of manufacturing employment and suddenly, near the end, 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 laid off and the down and out, but without defining or explaining much about these new jobs.
Americans must have jobs. Large scale unemployment in an urban society guarantees untenable social, economic and political conditions. Since Americans require jobs to survive we can be glad to learn total spending in the American economy has generated 28.1 million more jobs since 1990, even though manufacturing employment continues its mordant, mournful decline. In data just published in March 2008 by the Bureau of Labor Statistics, United States manufacturing employment dropped again for 2007, and down 3.8 million jobs since 1990.
The percentage share of manufacturing employment is now only slightly above 10 percent of establishment jobs and it too continues in decline. Construction employment is the only non-service employment with more jobs and it is barely half of manufacturing employment. It’s not just that service jobs are 83.9 percent of employment and climbing, but new jobs have to replace lost manufacturing jobs before there are more jobs. So even though there are 28.1 million more establishment jobs now than in 1990, there are 32 million more jobs in service sector jobs and construction in the same period.
Americans keep themselves busy inventing new service 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 service employment can be described in sobering detail. It is time to do just that.
The New Jobs
Over at the Bureau of Labor Statistics, a.k.a. BLS, they produce labor data within the North American Industry Classification System. The North American Industry Classification System (NAICS) defines a carefully crafted set of industry sectors and sub-sectors, which has sector divisions for agriculture, manufacturing, trade, government and others; 20 sectors in all. They publish United States employment data by industry within the NAICS sectors and also many sub sectors, industry groups and industries, over 1000 data series in all. Their data help us learn about those 32 million new service jobs.
Look at the new jobs in Administrative Support Services where BLS data shows an increase of 3.684 million jobs since 1990. In the NAICS documentation manual, administrative and support firms perform routine support activities for day-to-day operations of other businesses on a contract or fee basis. The NAICS definition does not tell us what companies in this sector are actually doing. The answer is lots of things. If I was going to work in this sector I would definitely pick a job in a travel agency. I can picture myself relaxing in a cheery office full of travel posters offering a witty patter of conversation describing sunny Caribbean tour sites. Pick your favorite! There are so many choices. Try a job in contracted office administration, facilities support services, employment placement, temporary help services, desktop publishing, word processing, telephone call centers, telephone answering services, telemarketing bureaus, copy centers, private mail centers, collection agencies, credit bureaus, repossession companies, court reporter companies, travel agencies, tour operators, convention bureau services, ticket services, investigation services, armored car services, security guards and patrol services, security systems companies, pest control companies, janitorial service companies, landscaping companies, carpet and upholstery cleaning services, chimney sweep companies, packaging and labeling services, convention and trade show organizers, and a few more, but I am out of breath.
With the decline in manufacturing, administrative support services looks like the ideal sector for unemployed production workers. They can start a small business. Free enterprisers sometimes speak in grandiose terms of investments in new innovations and technologies, but the administrative support services do not need much investment. A telephone, a computer, some office space should be enough to get started in many cases. Maybe a few tools: a vacuum, a feather duster, a toilet brush for the janitors; a sprayer and some chemicals for the pest control workers.
Establishments in this sector sell almost everything they do to other firms as supporting services to be carried out during a contract period. Contracts spell out performance criteria. There was a time when firms employed their own custodians and janitors. Even if starting wages were low, wages would rise with the cost of living for all employees in the company. The terms of employment were not subject to bidding and re-bidding as long as a custodian stayed with their employer.
A system of outsourcing administrative support services generates a cycle of bidding for contracts for landscaping, security services, janitorial services and others. Custodians work for contracting firms that constantly bid new contracts. Contracts tend to be one to three years, but allow cancellation on 30 days notice. It is labor intensive work. Seventy five to eighty percent of total costs come from wage costs and the contractor with the low bid is likely to be the one that pays the lowest wage.
The NAICS manual has a sector defined as food services and drinking places, which are mostly bars and restaurants. From 1990 to 2007 bar and restaurant jobs jumped 3.1 million. 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 lets 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 6.8 million jobs.
There are 9.6 million jobs in the restaurant business including fast food outlets, bars, and caterers. The total does not include food service workers at school cafeterias, hospitals, retail stores or ball parks, museums and other recreation facilities. Add them to the total and it comes to just over 11.3 million food service jobs.
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 American needs jobs, so now you know, you must go to restaurants. It’s your civic duty to employ America. Go out often. Be kind; leave a cash tip for your waiter or waitress.
People worry about recessions and unemployment, but worry is a waste of time. Americans spend themselves into jobs doing things like gambling where gaming dealers and gaming service workers have some of the 183 thousand new gambling jobs since 1990. Many object to gambling for moral, ethical and social reasons. The objectors are being swept away in the clamor to find work. BLS reports nearly 426 thousand employed in gambling including casino hotels.
Gambling is part of the leisure and hospitality industry, which generated a little more than 1.1 million new jobs not counting the restaurants already mentioned. Include 278 thousand new jobs at amusement parks, arcades, golf courses, country clubs, ski hills, and marinas. Fitness centers have more jobs than all of gambling with employment now over 508 thousand and 233 thousand new jobs since 1990. Fat means jobs in diet and exercise, even though both can be do-it-yourself services. People can walk in the park or walk on a treadmill; one has jobs, one does not. People can eat less or buy pills, powders, supplements, diet books, diet plans, counseling and weight watchers. Health clubs and diet schemes support transactions where fitness and aerobics instructors exceed 220 thousand jobs across the country.
New spending in repair and maintenance services and personal and laundry service generated 433 thousand new jobs from 1990 to 2007. Personal services include barber shops, beauty shops, laundry and dry cleaning, parking lots, wedding planners and a few more, but let us notice services entitled pet care services, except veterinary.
Pet care jobs make up a new and growing source of jobs at pet stores and in pet care services but also for one particular professional job: veterinarian. Veterinary services added 166 thousand jobs with gains every single year since 1990. We might suppose with farmers declining that the bovine, equine and porcine trades are relatively small compared to the canine and feline trades in the veterinary services sub sector. The employment growth implies a growing concern among Americans for the health and welfare of their pets and that is a good thing. Still with millions of actual Americans without health care insurance we might worry that some household pets get better health care than our fellow citizens.
Pet store employment nearly doubled to 93 thousand and pet care services more than doubled to 52 thousand jobs by 2007. Pet care services include doggy parlors with people employed as doggy trainers, doggy trimmers and doggy bathers. My grandfather had dogs and cats. There is a dog or two in family photos from the turn of the century. Dogs lived, dogs died, but grandfather never hauled one to a parlor for a bath. It’s different now. America needs jobs; dogs need a bath.
Pet stores are part of wholesale and retail trade services where buying at the mall, stores, and on-line helped generate another 3.1 million jobs in the 1990 to 2007 period. Both wholesale and retail trade have growing employment but at growth rates below the rate for total employment, which causes a decreasing percentage of wholesale and retail jobs in total establishment jobs. Actually trade jobs are 21.5 million, but the percentage of total employment is down over a full percent since 1990. 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. So far on-line catalog shopping has only 247 thousand jobs, which is good because they will not need to hire many retail salespersons or cashiers, two jobs that currently employ 8 million.
To keep ourselves employed we must have steadily rising spending but in areas where labor productivity is not growing too fast. America cannot rely on new spending in agriculture, mining, or manufacturing to create jobs because the relentless tide of productivity growth and actions in the global economy restrict these jobs. It is not enough that other low productivity jobs increase; they have to increase faster than the national average in order to absorb the lost share of employment in agriculture, mining and manufacturing.
Instead of manufacturing we now rely on service jobs like Administrative Support services, which not only had the job growth mentioned above, but a rising share of national employment. Some of the 3.7 million new administrative support jobs include 1.45 million new jobs in temporary help services, and 564 thousand new jobs in professional employer organizations, jobs which help client firms to fine-tune employment with the ebb and tide of business. Count 386 thousand new jobs in landscaping services, 269 thousand new jobs in security guard companies and investigation services, 228 thousand new jobs in janitorial services, 127 thousand new jobs at telemarketing bureaus and telephone answering services. Include 89 thousand new jobs at collection agencies where employment more than doubled since 1990.
Those jobs went up while manufacturing employment went down by 3.8 million, but the manufacturing decline represents a drop of more than 5 percent in total establishment employment. Because administrative support has a higher share of America’s jobs, jobs like landscaping worker help replace manufacturing jobs like machinist. Restaurant jobs grow faster than the national average and so cook, waiter, and waitress replace manufacturing jobs.
Bail bonding, dating services, shoeshine services, escort services, and wedding planners had 16 thousand new jobs between 1990 and 2007. Even though these are a small number of jobs, the increase is a rising percentage of total jobs, which helps replace those lost manufacturing jobs.
Many of the new jobs are low paid but there are new jobs in the professions that pay good salaries. Legal services make up 233 thousand new jobs from 2.8 million new jobs in professional, scientific and technical services, where lawyers may represent clients in a personal bankruptcy. The fantastic growth of personal bankruptcies is well documented by Elizabeth Warren in her book the Two Income Trap. On the web site for U.S. courts they list 1,604,848 non business filings for bankruptcies for the 12 months ending June 2005.
Personal bankruptcies generate professional jobs at law firms, courts, and counseling offices, but every dollar at issue in a bankruptcy was a former expenditure, all of which created jobs. The bill for a lawyer’s services produced in a personal bankruptcy goes directly into the Gross Domestic Product. When Brian Williams, Charles Gibson, or Katie Couric come on with the evening news and report this quarter’s GDP up 3.1 percent, or whatever it happens to be, everyone knows that is a good thing. No long winded explanations or in depth reports are needed. More GDP means more jobs, more income, more profits.
In GDP accounting a dollar’s worth of personal bankruptcy counts the same as a dollar’s worth of car, or clothes or food. With manufactured goods we get things we can drive, things we can wear, things we can eat, but a reasonable person might see more personal bankruptcies as a bad thing. Bad or not, spending ourselves into jobs makes us rely on spending for things like personal bankruptcy, a specialty where a steady flow of jobs requires a steady flow of bankruptcies.
Lawyers make up a modest share of new professional employment compared to education. New education spending generated new government jobs at public schools and colleges and new jobs in private schools and colleges for a total of 3.9 million new jobs. Educational services sector has 5.6 million jobs requiring BA or higher degree training. That is more jobs needing college degree skills than any of law, medicine, accounting, engineering, architecture, or computer professionals.
We hear regular complaints about failing schools and the need for educational accountability in the popular media. The constant carping over failing schools gets tiresome for teachers. They hear the complaints from politicians and other worthies who have never set foot in a classroom, but the publicity helps justify more taxes, bigger school budgets, and tens of thousands of new jobs. Since the year 2000, BLS reports 473 thousand new jobs as educational administrators, school counselors, K-12 teachers, including 18 thousand more remedial teachers, 24 thousand more enrichment teachers, 33 thousand more special education teachers and 40 thousand more instructional coordinators. The growth is fast enough that teaching has a higher share of total employment with growth rates three to five times higher than population growth for children under 18.
National Center for Education Statistics reports the number of students per faculty averages just under 16 in America’s public schools. That number has dropped continuously since the 1960’s when it was 26. A reasonable person might think one teacher for 16 students means higher quality than the 1960’s when there was one teacher for 26 students, but better or worse complaining sure is good for jobs.
Back in the early part of the last century my grandfather worked as a dairy farmer. When he gave it up and retired he was still using a horse drawn plow, but it was around that time that wider use of steam tractors and other mechanized farm equipment began to dramatically raise farm productivity, lower farm prices and reduce the need for farmers. Rising productivity helped make labor available for the new jobs in manufacturing.
That was an age when more manufacturing meant more manufacturing jobs. That age has passed. Trouble is Americans still think about jobs the same way they did long ago. Everyone is supposed to get out in the free-for-all, rustle up some work and then live on the wage. Finding work in the American free-for-all will be easier the more American’s buy personal services.
BLS reports 63 thousand new jobs in depilatory, ear piercing, hair replacement, massage parlors, diet and weight loss reducing centers, permanent makeup salons, steam and Turkish baths, tanning salons and tattoo parlors. An efficient massage parlor needs a steady flow of customers so that labor is utilized doing a steady flow of massages. If no customers show up in the morning and the masseuse sits around until 2:00 in the afternoon waiting for clients, then massages per masseuse and massages per hour go way down and labor productivity with it.
Massage parlors are similar to barbershops, and beauty salons and a variety of personal services that tend to make inefficient use of labor, but they have several advantages for a society that must have jobs. The services cannot be imported, nor moved offshore in the global economy. The age-old difficulty in scheduling steady work continues unaffected by technological advancement so that labor will continue to be inefficient and support jobs. The well-to-do need to focus attention on personal services to create jobs. They need college consultants, piano lessons, personal trainers, spa sessions, dog walkers, cat sitters, charity balls, coach camps and live in personal aides or nannies, which are also known in the Standard Occupational Classifications as personal and home care aides. BLS reports 224,000 new personal and home care aides between 2000 and 2006, double the increase for engineers.
Personal services have only a small share of the inefficient jobs American needs. Americans have not yet acknowledged that finance in a digital world does not require paper: not for checks, not for bills, not for money. My money, your money, all money is nothing but computer code. Some Americans enjoy the convenience of on line banking from their home computer hooked up to a broadband connection. These are people comfortable having their money flying through the air. Not everybody feels so good about the efficient digital world; they want to drive to the bank and exchange paper with a teller. America now employs almost 608 thousand tellers. If Americans decide to be efficient, America will have fewer tellers, a lot fewer.
Tellers are part of the financial activities sector, where transactions in banking, lending, credit cards, stocks, bonds, insurance, and real estate generated 1.7 million new jobs between 1990 and 2007. There was a time long ago when borrowing and lending money was for railroads, utilities, factories and manufacturing. Loans played an important role in creating long-lived assets. Families borrowed, but mostly to buy houses.
Today’s banks are still happy to earn interest making these loans, the problem is banks have more loanable funds than they have industry and infra structure borrowers. In the last chapter of his recent book, The Age of Turbulence, former Federal Reserve Chair, Alan Greenspan writes “The slow down in innovation is particularly evident in the dramatic swing in corporation’s use of their internal cash flow from fixed investment to buybacks of company common stock and cash disbursed to shareholders in the process of implementing mergers and acquisitions.”
Banks and financial intermediaries like mergers and acquisitions and many consumer borrowers who buy now and pay later. Financial intermediaries cannot wait for borrowers so they advertise and promote consumer credit. Year by year Americans charge more and more consumer and retail transactions that generate a steady flow of merchant discounts, interest charges, fees, penalties and payments that support new jobs in the finance industry.
The tendency toward consumer credit shows up in the job data because deposit institutions, formerly known as banks, lost 86 thousand jobs since 1990 while non deposit institutions in credit card issuing, sales financing, consumer finance, loan companies, personal credit, student loans, home equity credit lending and a few more jumped 386 thousand almost doubling employment. Real estate credit with home equity credit lending was 110 thousand jobs in 1990 and 297 thousand in 2007.
The Bureau of Labor of Statistics reports 158 thousand new jobs as loan officers and counselors between the end of 1999 and May 2007 with just fewer than 100 thousand new jobs as loan interviewers in the same period. Both grow at rates 4 to 5 times the national average. These are some of America’s jobs that depend on American’s willingness to lead a life in debt. Many books and many articles describe buying and borrowing as national excess: a real addiction that implies weakness and lack of self-control. That view, among other things, ignores the employment it generates.
In an article in the Washington Post on May 7, 2007, entitled “Pressure at Mortgage Firm Led to Mass Approval of Bad Loans”, we learn that 20 percent of America’s mortgage loans are now risky “sub prime” loans. An official from the Mortgage Broker Association for Responsible Lending tells readers that loan officers and real estate appraisers are the “first line of defense” against bad loans. Very nice, very ethical, but if Americans actually curb their borrowing habits many of the above mentioned job holders will pay a visit to the unemployment office.
Publishing, broadcasting, telecommunications and the Internet have 341 thousand more jobs now than 1990, but there are ominous trends and job totals in these information sectors are down 600 thousand since 2000. Before the digital world, publishing, broadcasting and telephone companies operated in separate markets. In today’s digital world landline, wireless, and cable companies offer phone services as well as Internet and cable TV services using the same or similar equipment and technologies. People have a choice to get news and entertainment over broadcast networks, the Internet, newspapers, cable or their telephone.
Now that everybody is able and willing to get into everybody else’s business the future looks promising for developing new products and new innovations in information services. How these businesses will compete with each other continues to be a negotiation and mystery, but the low cost of providing service to the incremental customer and the ability of individual companies to offer multiple services through one network puts severe pressure on jobs.
Many are familiar with the website called Craigslist.com. What they do on Craigslist depends on your point of view, but I would call it self serve classified advertising, available free to all users, except three metropolitan areas that pay a token fee. There are message boards, chat rooms and some other appealing services, all free, but roughly speaking it is classified advertising by geographic area for the entire world and no charge.
When I first heard about Craigslist a few years back, they had an “about us” link where I learned they had 18 employees. Last time I looked they are up to 24. In the new digital world, we could have all the classified advertising anybody wants, anywhere in the world, with just 24 jobs.
Some newspapers have begun to eliminate stock prices from their daily business news. They cannot compete with the graphs, charts and continuously updating stock quotations available on the Internet. Some Americans, especially older Americans, want to maintain long held habits and prefer their stock quotes and their classifieds from newspapers, just as some even keep a Yellow Pages around the house, but the future of information will be electronic and the job trends will be down.
When it comes to finding a job, remember the government, the mighty engine of employment. Despite all the nasty and derogatory things said about government, its taxing, borrowing and spending generated just over 1.6 million new jobs in addition to those mentioned in education. Actually a monthly average of 22.2 million work in federal, state and local government including education, a higher share of total establishment employment than any private sector category.
The 1.6 million new jobs are for occupations in state and local government services like public health, social services and corrections as well as general and financial administration including taxes. When I look at the BLS national employment matrix under state and local government, I find the most important occupation with the highest percentage of state employment, after I subtract all the education jobs, happens to be correctional officer and jailor. It is the fifth leading job in local government. Combined with supervisory officers, correctional officers and jailers have more than 472 thousand jobs. State and local government also support another 94 thousand jobs as probation officers and correctional treatment specialists.
Some of government’s required services have administration through multiple bureaucracies of dedicated taxes and charges for workmen’s compensation, unemployment insurance, social security taxes, business franchise taxes, business equipment taxes, property taxes, utility taxes and a few more. Every new job in America helps bring action to bureaucracies of work and jobs in recording, filing, collecting and dispersing. There is no natural law that requires each little tax to go with each little service, but it sure is good for jobs. America needs jobs; America needs rigmarole.
America has the world leader in rigmarole jobs, which is America’s health care system with 6.1 million new jobs since 1990, a total that includes social services like counseling, social work and child care. Career employment in health care applies to the 47 occupations defined as health care practitioners. These are physician, nurse, therapist, technologist and technician jobs needing degrees and a license. People in these jobs actually deliver health care, but they make up 5.1 million jobs out of 15.4 million health care jobs. The other 10.3 million jobs are helper, office work and social work including childcare.
The childcare segment in health care has 461 thousand of the 6.1 million new jobs mentioned above. Back in the 1950’s when the labor force participation rate for women was under 40 percent, childcare tended to be the unrecorded and untaxed work of moms. Now two income households want commercial childcare. Establishment employment in child day care services averaged 388 thousand in 1990, but 849 thousand in 2007.
In other sectors of the economy, bills tend to be a two party transaction between a customer and a vender, but seldom so in health care. One illness or injury starts a billing shuffle through separate bureaucracies at hospitals, laboratories, clinics, HMO’s, PPO’s, IPO’s, but also private insurance companies, independent billing agencies and bureaucracies at Medicare, Medicaid, Social Security, workmen’s compensation or the Veterans Administration. Medicare, Medicaid and workmen’s compensation are federal programs with federal bureaucracy, but also administered by the states through 50 separate bureaucracies.
More health care brings growth to health care jobs as financial clerks and information and records clerks, which are bill and account collectors, billing and posting clerks, bookkeepers, office clerks, receptionists, and secretaries, where health care office work and billing exceeds 2.5 million jobs, roughly six of these jobs for every doctor job.
Those are just the jobs in health care for people who send out the bills. It doesn’t count the insurance company or government bureaucracy jobs for the people who take them in. National health insurance could lead to standardization and efficiency with computerized billing. But we better be careful about efficiency because efficient health care will eliminate tens of thousands of jobs in office work and the paper shuffle. Advocates of national health care, beware.
Remember we are looking for 32 million new jobs from 1990 to 2007. I am keeping track of the arithmetic and so far we are up to 28.3 million new jobs, with about 3.7 million more to go. Count nearly 873 thousand new jobs in transportation and utilities with most of the increase in trucking and a new growth industry, warehousing and storage, but some losses in utility services. Add another 797 thousand new office jobs in religious and non-profit organizations. Add 128 thousand jobs for waste management and subtract 469 thousand job reductions in the federal government to account for all the service job changes from 1990 to 2007. Finally 2.35 million new construction jobs. Construction is the only non-service industry with more jobs but it does not make up for losses of manufacturing, agriculture, mining and utility jobs. There we have America’s 32 million new service jobs since 1990: the good, the bad and the ugly.
Toughing it Out
Americans continue to work like demons and spend like maniacs. Given the prevailing attitude toward work and jobs, there is no other choice. Everyone is expected to be productive and support themselves, no matter how good, or how bad the available jobs. The self-support requirement puts enormous pressure on individuals and families when productivity gains eliminate jobs at the same time a growing population and new immigrants put more and more people in the workforce.
The popular media likes to quote politicians and their critics who characterize some government programs as pork, or pork barrel spending. In America, one guy’s pork is another guy’s job and even though that has always been true, we are now a society where restaurants, gambling, pet care, landscaping, prisons, child care, and loans and credit cards support millions of jobs, but also a growing share of America’s work. These are the jobs we invent when efficiency reduces the need for labor in agriculture, mining, manufacturing, but more and more for jobs at utilities, information services, and finance. Maybe we should not call them pork, but they do not look like the high technology, high skills, advanced degree jobs advocates of the free-for-all predict for the future.
The jobs we invent are fewer than the jobs we preserve through old habits and practices. BLS reports 23.3 million office and administrative support jobs as clerks, secretaries, receptionists and bookkeepers. The total is holding steady since late 1999 in spite of digital technology and office automation. Customer Service Representative is also one of those administrative support occupations. It holds 8th place among America’s occupations with 2.2 million total jobs in nearly every sector of the economy, but especially in finance and insurance.
Customer Service Representative gets media attention because America’s corporations outsource some of this work to India and other countries. Many regard outsourcing as the action of ruthless corporate tycoons ripping the heart out of America, but allow me to suggest outsourcing is very much a domestic issue. Over 80 percent of Customer Service Representative jobs are reported for the country’s metropolitan areas, where millions commute by car and donate thousands of hours of their time using up gasoline and wearing out their cars so that others might work. Unlike production workers who must work at factories, customer service work can be anywhere with a computer and a telephone, as the companies themselves have so definitely proved. Doing computer work from home as telecommuters not only reduces jobs in the car industry, car repairs, gasoline, cement, and highway construction, but also for jobs in real estate, office rental, building maintenance, building repair and local government. Telecommuting could save business and society many costs; it will also eliminate many jobs.
Nobody knows for sure how many jobs go abroad to outsourcing because no one has anything but anecdotal data. At BLS they have a building full of people producing American data, but they do not produce data for jobs lost abroad. Individual businesses know their own situation, but as everyone producing data can tell you, business does not like sharing data with competitors, nor the inquiring public.
But why look abroad when there are so many ways for business and consumers alike to adopt new habits and new technologies to eliminate jobs and reduce work right here in America? Americans often think of their jobs as a personal achievement in a rough and tumble free-for-all of personal competition: a survival of the fittest.
Instead, our collective willingness to spend all our money as fast as we can, along with our collective willingness to invent new work and cling to old inefficiencies has kept the job mill going over the last 15 to 20 years, but it will get tougher. America needs some new attitudes and some new policies. It is time to rethink the full time work week, overtime pay, the minimum wage, union recognition, the payroll tax and health care tied to jobs among many job issues. But these are topics for another article.
Americans should know more about their jobs. When we open our newspapers these sad Sunday mornings and read stories about Circuit City firings, plant closings and jobs moving to Bangalore, it is understandable that many think about job losses, but that is a mistake. America has job losses, but a bigger problem is the new jobs we are taking rather than the old jobs we are losing.
Many know America has fewer manufacturing jobs and more service jobs, but the service industry is frequently described in generic terms in the popular media. There will be an article discussing the demise of manufacturing employment and suddenly, near the end, 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 laid off and the down and out, but without defining or explaining much about these new jobs.
Americans must have jobs. Large scale unemployment in an urban society guarantees untenable social, economic and political conditions. Since Americans require jobs to survive we can be glad to learn total spending in the American economy has generated 28.1 million more jobs since 1990, even though manufacturing employment continues its mordant, mournful decline. In data just published in March 2008 by the Bureau of Labor Statistics, United States manufacturing employment dropped again for 2007, and down 3.8 million jobs since 1990.
The percentage share of manufacturing employment is now only slightly above 10 percent of establishment jobs and it too continues in decline. Construction employment is the only non-service employment with more jobs and it is barely half of manufacturing employment. It’s not just that service jobs are 83.9 percent of employment and climbing, but new jobs have to replace lost manufacturing jobs before there are more jobs. So even though there are 28.1 million more establishment jobs now than in 1990, there are 32 million more jobs in service sector jobs and construction in the same period.
Americans keep themselves busy inventing new service 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 service employment can be described in sobering detail. It is time to do just that.
The New Jobs
Over at the Bureau of Labor Statistics, a.k.a. BLS, they produce labor data within the North American Industry Classification System. The North American Industry Classification System (NAICS) defines a carefully crafted set of industry sectors and sub-sectors, which has sector divisions for agriculture, manufacturing, trade, government and others; 20 sectors in all. They publish United States employment data by industry within the NAICS sectors and also many sub sectors, industry groups and industries, over 1000 data series in all. Their data help us learn about those 32 million new service jobs.
Look at the new jobs in Administrative Support Services where BLS data shows an increase of 3.684 million jobs since 1990. In the NAICS documentation manual, administrative and support firms perform routine support activities for day-to-day operations of other businesses on a contract or fee basis. The NAICS definition does not tell us what companies in this sector are actually doing. The answer is lots of things. If I was going to work in this sector I would definitely pick a job in a travel agency. I can picture myself relaxing in a cheery office full of travel posters offering a witty patter of conversation describing sunny Caribbean tour sites. Pick your favorite! There are so many choices. Try a job in contracted office administration, facilities support services, employment placement, temporary help services, desktop publishing, word processing, telephone call centers, telephone answering services, telemarketing bureaus, copy centers, private mail centers, collection agencies, credit bureaus, repossession companies, court reporter companies, travel agencies, tour operators, convention bureau services, ticket services, investigation services, armored car services, security guards and patrol services, security systems companies, pest control companies, janitorial service companies, landscaping companies, carpet and upholstery cleaning services, chimney sweep companies, packaging and labeling services, convention and trade show organizers, and a few more, but I am out of breath.
With the decline in manufacturing, administrative support services looks like the ideal sector for unemployed production workers. They can start a small business. Free enterprisers sometimes speak in grandiose terms of investments in new innovations and technologies, but the administrative support services do not need much investment. A telephone, a computer, some office space should be enough to get started in many cases. Maybe a few tools: a vacuum, a feather duster, a toilet brush for the janitors; a sprayer and some chemicals for the pest control workers.
Establishments in this sector sell almost everything they do to other firms as supporting services to be carried out during a contract period. Contracts spell out performance criteria. There was a time when firms employed their own custodians and janitors. Even if starting wages were low, wages would rise with the cost of living for all employees in the company. The terms of employment were not subject to bidding and re-bidding as long as a custodian stayed with their employer.
A system of outsourcing administrative support services generates a cycle of bidding for contracts for landscaping, security services, janitorial services and others. Custodians work for contracting firms that constantly bid new contracts. Contracts tend to be one to three years, but allow cancellation on 30 days notice. It is labor intensive work. Seventy five to eighty percent of total costs come from wage costs and the contractor with the low bid is likely to be the one that pays the lowest wage.
The NAICS manual has a sector defined as food services and drinking places, which are mostly bars and restaurants. From 1990 to 2007 bar and restaurant jobs jumped 3.1 million. 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 lets 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 6.8 million jobs.
There are 9.6 million jobs in the restaurant business including fast food outlets, bars, and caterers. The total does not include food service workers at school cafeterias, hospitals, retail stores or ball parks, museums and other recreation facilities. Add them to the total and it comes to just over 11.3 million food service jobs.
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 American needs jobs, so now you know, you must go to restaurants. It’s your civic duty to employ America. Go out often. Be kind; leave a cash tip for your waiter or waitress.
People worry about recessions and unemployment, but worry is a waste of time. Americans spend themselves into jobs doing things like gambling where gaming dealers and gaming service workers have some of the 183 thousand new gambling jobs since 1990. Many object to gambling for moral, ethical and social reasons. The objectors are being swept away in the clamor to find work. BLS reports nearly 426 thousand employed in gambling including casino hotels.
Gambling is part of the leisure and hospitality industry, which generated a little more than 1.1 million new jobs not counting the restaurants already mentioned. Include 278 thousand new jobs at amusement parks, arcades, golf courses, country clubs, ski hills, and marinas. Fitness centers have more jobs than all of gambling with employment now over 508 thousand and 233 thousand new jobs since 1990. Fat means jobs in diet and exercise, even though both can be do-it-yourself services. People can walk in the park or walk on a treadmill; one has jobs, one does not. People can eat less or buy pills, powders, supplements, diet books, diet plans, counseling and weight watchers. Health clubs and diet schemes support transactions where fitness and aerobics instructors exceed 220 thousand jobs across the country.
New spending in repair and maintenance services and personal and laundry service generated 433 thousand new jobs from 1990 to 2007. Personal services include barber shops, beauty shops, laundry and dry cleaning, parking lots, wedding planners and a few more, but let us notice services entitled pet care services, except veterinary.
Pet care jobs make up a new and growing source of jobs at pet stores and in pet care services but also for one particular professional job: veterinarian. Veterinary services added 166 thousand jobs with gains every single year since 1990. We might suppose with farmers declining that the bovine, equine and porcine trades are relatively small compared to the canine and feline trades in the veterinary services sub sector. The employment growth implies a growing concern among Americans for the health and welfare of their pets and that is a good thing. Still with millions of actual Americans without health care insurance we might worry that some household pets get better health care than our fellow citizens.
Pet store employment nearly doubled to 93 thousand and pet care services more than doubled to 52 thousand jobs by 2007. Pet care services include doggy parlors with people employed as doggy trainers, doggy trimmers and doggy bathers. My grandfather had dogs and cats. There is a dog or two in family photos from the turn of the century. Dogs lived, dogs died, but grandfather never hauled one to a parlor for a bath. It’s different now. America needs jobs; dogs need a bath.
Pet stores are part of wholesale and retail trade services where buying at the mall, stores, and on-line helped generate another 3.1 million jobs in the 1990 to 2007 period. Both wholesale and retail trade have growing employment but at growth rates below the rate for total employment, which causes a decreasing percentage of wholesale and retail jobs in total establishment jobs. Actually trade jobs are 21.5 million, but the percentage of total employment is down over a full percent since 1990. 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. So far on-line catalog shopping has only 247 thousand jobs, which is good because they will not need to hire many retail salespersons or cashiers, two jobs that currently employ 8 million.
To keep ourselves employed we must have steadily rising spending but in areas where labor productivity is not growing too fast. America cannot rely on new spending in agriculture, mining, or manufacturing to create jobs because the relentless tide of productivity growth and actions in the global economy restrict these jobs. It is not enough that other low productivity jobs increase; they have to increase faster than the national average in order to absorb the lost share of employment in agriculture, mining and manufacturing.
Instead of manufacturing we now rely on service jobs like Administrative Support services, which not only had the job growth mentioned above, but a rising share of national employment. Some of the 3.7 million new administrative support jobs include 1.45 million new jobs in temporary help services, and 564 thousand new jobs in professional employer organizations, jobs which help client firms to fine-tune employment with the ebb and tide of business. Count 386 thousand new jobs in landscaping services, 269 thousand new jobs in security guard companies and investigation services, 228 thousand new jobs in janitorial services, 127 thousand new jobs at telemarketing bureaus and telephone answering services. Include 89 thousand new jobs at collection agencies where employment more than doubled since 1990.
Those jobs went up while manufacturing employment went down by 3.8 million, but the manufacturing decline represents a drop of more than 5 percent in total establishment employment. Because administrative support has a higher share of America’s jobs, jobs like landscaping worker help replace manufacturing jobs like machinist. Restaurant jobs grow faster than the national average and so cook, waiter, and waitress replace manufacturing jobs.
Bail bonding, dating services, shoeshine services, escort services, and wedding planners had 16 thousand new jobs between 1990 and 2007. Even though these are a small number of jobs, the increase is a rising percentage of total jobs, which helps replace those lost manufacturing jobs.
Many of the new jobs are low paid but there are new jobs in the professions that pay good salaries. Legal services make up 233 thousand new jobs from 2.8 million new jobs in professional, scientific and technical services, where lawyers may represent clients in a personal bankruptcy. The fantastic growth of personal bankruptcies is well documented by Elizabeth Warren in her book the Two Income Trap. On the web site for U.S. courts they list 1,604,848 non business filings for bankruptcies for the 12 months ending June 2005.
Personal bankruptcies generate professional jobs at law firms, courts, and counseling offices, but every dollar at issue in a bankruptcy was a former expenditure, all of which created jobs. The bill for a lawyer’s services produced in a personal bankruptcy goes directly into the Gross Domestic Product. When Brian Williams, Charles Gibson, or Katie Couric come on with the evening news and report this quarter’s GDP up 3.1 percent, or whatever it happens to be, everyone knows that is a good thing. No long winded explanations or in depth reports are needed. More GDP means more jobs, more income, more profits.
In GDP accounting a dollar’s worth of personal bankruptcy counts the same as a dollar’s worth of car, or clothes or food. With manufactured goods we get things we can drive, things we can wear, things we can eat, but a reasonable person might see more personal bankruptcies as a bad thing. Bad or not, spending ourselves into jobs makes us rely on spending for things like personal bankruptcy, a specialty where a steady flow of jobs requires a steady flow of bankruptcies.
Lawyers make up a modest share of new professional employment compared to education. New education spending generated new government jobs at public schools and colleges and new jobs in private schools and colleges for a total of 3.9 million new jobs. Educational services sector has 5.6 million jobs requiring BA or higher degree training. That is more jobs needing college degree skills than any of law, medicine, accounting, engineering, architecture, or computer professionals.
We hear regular complaints about failing schools and the need for educational accountability in the popular media. The constant carping over failing schools gets tiresome for teachers. They hear the complaints from politicians and other worthies who have never set foot in a classroom, but the publicity helps justify more taxes, bigger school budgets, and tens of thousands of new jobs. Since the year 2000, BLS reports 473 thousand new jobs as educational administrators, school counselors, K-12 teachers, including 18 thousand more remedial teachers, 24 thousand more enrichment teachers, 33 thousand more special education teachers and 40 thousand more instructional coordinators. The growth is fast enough that teaching has a higher share of total employment with growth rates three to five times higher than population growth for children under 18.
National Center for Education Statistics reports the number of students per faculty averages just under 16 in America’s public schools. That number has dropped continuously since the 1960’s when it was 26. A reasonable person might think one teacher for 16 students means higher quality than the 1960’s when there was one teacher for 26 students, but better or worse complaining sure is good for jobs.
Back in the early part of the last century my grandfather worked as a dairy farmer. When he gave it up and retired he was still using a horse drawn plow, but it was around that time that wider use of steam tractors and other mechanized farm equipment began to dramatically raise farm productivity, lower farm prices and reduce the need for farmers. Rising productivity helped make labor available for the new jobs in manufacturing.
That was an age when more manufacturing meant more manufacturing jobs. That age has passed. Trouble is Americans still think about jobs the same way they did long ago. Everyone is supposed to get out in the free-for-all, rustle up some work and then live on the wage. Finding work in the American free-for-all will be easier the more American’s buy personal services.
BLS reports 63 thousand new jobs in depilatory, ear piercing, hair replacement, massage parlors, diet and weight loss reducing centers, permanent makeup salons, steam and Turkish baths, tanning salons and tattoo parlors. An efficient massage parlor needs a steady flow of customers so that labor is utilized doing a steady flow of massages. If no customers show up in the morning and the masseuse sits around until 2:00 in the afternoon waiting for clients, then massages per masseuse and massages per hour go way down and labor productivity with it.
Massage parlors are similar to barbershops, and beauty salons and a variety of personal services that tend to make inefficient use of labor, but they have several advantages for a society that must have jobs. The services cannot be imported, nor moved offshore in the global economy. The age-old difficulty in scheduling steady work continues unaffected by technological advancement so that labor will continue to be inefficient and support jobs. The well-to-do need to focus attention on personal services to create jobs. They need college consultants, piano lessons, personal trainers, spa sessions, dog walkers, cat sitters, charity balls, coach camps and live in personal aides or nannies, which are also known in the Standard Occupational Classifications as personal and home care aides. BLS reports 224,000 new personal and home care aides between 2000 and 2006, double the increase for engineers.
Personal services have only a small share of the inefficient jobs American needs. Americans have not yet acknowledged that finance in a digital world does not require paper: not for checks, not for bills, not for money. My money, your money, all money is nothing but computer code. Some Americans enjoy the convenience of on line banking from their home computer hooked up to a broadband connection. These are people comfortable having their money flying through the air. Not everybody feels so good about the efficient digital world; they want to drive to the bank and exchange paper with a teller. America now employs almost 608 thousand tellers. If Americans decide to be efficient, America will have fewer tellers, a lot fewer.
Tellers are part of the financial activities sector, where transactions in banking, lending, credit cards, stocks, bonds, insurance, and real estate generated 1.7 million new jobs between 1990 and 2007. There was a time long ago when borrowing and lending money was for railroads, utilities, factories and manufacturing. Loans played an important role in creating long-lived assets. Families borrowed, but mostly to buy houses.
Today’s banks are still happy to earn interest making these loans, the problem is banks have more loanable funds than they have industry and infra structure borrowers. In the last chapter of his recent book, The Age of Turbulence, former Federal Reserve Chair, Alan Greenspan writes “The slow down in innovation is particularly evident in the dramatic swing in corporation’s use of their internal cash flow from fixed investment to buybacks of company common stock and cash disbursed to shareholders in the process of implementing mergers and acquisitions.”
Banks and financial intermediaries like mergers and acquisitions and many consumer borrowers who buy now and pay later. Financial intermediaries cannot wait for borrowers so they advertise and promote consumer credit. Year by year Americans charge more and more consumer and retail transactions that generate a steady flow of merchant discounts, interest charges, fees, penalties and payments that support new jobs in the finance industry.
The tendency toward consumer credit shows up in the job data because deposit institutions, formerly known as banks, lost 86 thousand jobs since 1990 while non deposit institutions in credit card issuing, sales financing, consumer finance, loan companies, personal credit, student loans, home equity credit lending and a few more jumped 386 thousand almost doubling employment. Real estate credit with home equity credit lending was 110 thousand jobs in 1990 and 297 thousand in 2007.
The Bureau of Labor of Statistics reports 158 thousand new jobs as loan officers and counselors between the end of 1999 and May 2007 with just fewer than 100 thousand new jobs as loan interviewers in the same period. Both grow at rates 4 to 5 times the national average. These are some of America’s jobs that depend on American’s willingness to lead a life in debt. Many books and many articles describe buying and borrowing as national excess: a real addiction that implies weakness and lack of self-control. That view, among other things, ignores the employment it generates.
In an article in the Washington Post on May 7, 2007, entitled “Pressure at Mortgage Firm Led to Mass Approval of Bad Loans”, we learn that 20 percent of America’s mortgage loans are now risky “sub prime” loans. An official from the Mortgage Broker Association for Responsible Lending tells readers that loan officers and real estate appraisers are the “first line of defense” against bad loans. Very nice, very ethical, but if Americans actually curb their borrowing habits many of the above mentioned job holders will pay a visit to the unemployment office.
Publishing, broadcasting, telecommunications and the Internet have 341 thousand more jobs now than 1990, but there are ominous trends and job totals in these information sectors are down 600 thousand since 2000. Before the digital world, publishing, broadcasting and telephone companies operated in separate markets. In today’s digital world landline, wireless, and cable companies offer phone services as well as Internet and cable TV services using the same or similar equipment and technologies. People have a choice to get news and entertainment over broadcast networks, the Internet, newspapers, cable or their telephone.
Now that everybody is able and willing to get into everybody else’s business the future looks promising for developing new products and new innovations in information services. How these businesses will compete with each other continues to be a negotiation and mystery, but the low cost of providing service to the incremental customer and the ability of individual companies to offer multiple services through one network puts severe pressure on jobs.
Many are familiar with the website called Craigslist.com. What they do on Craigslist depends on your point of view, but I would call it self serve classified advertising, available free to all users, except three metropolitan areas that pay a token fee. There are message boards, chat rooms and some other appealing services, all free, but roughly speaking it is classified advertising by geographic area for the entire world and no charge.
When I first heard about Craigslist a few years back, they had an “about us” link where I learned they had 18 employees. Last time I looked they are up to 24. In the new digital world, we could have all the classified advertising anybody wants, anywhere in the world, with just 24 jobs.
Some newspapers have begun to eliminate stock prices from their daily business news. They cannot compete with the graphs, charts and continuously updating stock quotations available on the Internet. Some Americans, especially older Americans, want to maintain long held habits and prefer their stock quotes and their classifieds from newspapers, just as some even keep a Yellow Pages around the house, but the future of information will be electronic and the job trends will be down.
When it comes to finding a job, remember the government, the mighty engine of employment. Despite all the nasty and derogatory things said about government, its taxing, borrowing and spending generated just over 1.6 million new jobs in addition to those mentioned in education. Actually a monthly average of 22.2 million work in federal, state and local government including education, a higher share of total establishment employment than any private sector category.
The 1.6 million new jobs are for occupations in state and local government services like public health, social services and corrections as well as general and financial administration including taxes. When I look at the BLS national employment matrix under state and local government, I find the most important occupation with the highest percentage of state employment, after I subtract all the education jobs, happens to be correctional officer and jailor. It is the fifth leading job in local government. Combined with supervisory officers, correctional officers and jailers have more than 472 thousand jobs. State and local government also support another 94 thousand jobs as probation officers and correctional treatment specialists.
Some of government’s required services have administration through multiple bureaucracies of dedicated taxes and charges for workmen’s compensation, unemployment insurance, social security taxes, business franchise taxes, business equipment taxes, property taxes, utility taxes and a few more. Every new job in America helps bring action to bureaucracies of work and jobs in recording, filing, collecting and dispersing. There is no natural law that requires each little tax to go with each little service, but it sure is good for jobs. America needs jobs; America needs rigmarole.
America has the world leader in rigmarole jobs, which is America’s health care system with 6.1 million new jobs since 1990, a total that includes social services like counseling, social work and child care. Career employment in health care applies to the 47 occupations defined as health care practitioners. These are physician, nurse, therapist, technologist and technician jobs needing degrees and a license. People in these jobs actually deliver health care, but they make up 5.1 million jobs out of 15.4 million health care jobs. The other 10.3 million jobs are helper, office work and social work including childcare.
The childcare segment in health care has 461 thousand of the 6.1 million new jobs mentioned above. Back in the 1950’s when the labor force participation rate for women was under 40 percent, childcare tended to be the unrecorded and untaxed work of moms. Now two income households want commercial childcare. Establishment employment in child day care services averaged 388 thousand in 1990, but 849 thousand in 2007.
In other sectors of the economy, bills tend to be a two party transaction between a customer and a vender, but seldom so in health care. One illness or injury starts a billing shuffle through separate bureaucracies at hospitals, laboratories, clinics, HMO’s, PPO’s, IPO’s, but also private insurance companies, independent billing agencies and bureaucracies at Medicare, Medicaid, Social Security, workmen’s compensation or the Veterans Administration. Medicare, Medicaid and workmen’s compensation are federal programs with federal bureaucracy, but also administered by the states through 50 separate bureaucracies.
More health care brings growth to health care jobs as financial clerks and information and records clerks, which are bill and account collectors, billing and posting clerks, bookkeepers, office clerks, receptionists, and secretaries, where health care office work and billing exceeds 2.5 million jobs, roughly six of these jobs for every doctor job.
Those are just the jobs in health care for people who send out the bills. It doesn’t count the insurance company or government bureaucracy jobs for the people who take them in. National health insurance could lead to standardization and efficiency with computerized billing. But we better be careful about efficiency because efficient health care will eliminate tens of thousands of jobs in office work and the paper shuffle. Advocates of national health care, beware.
Remember we are looking for 32 million new jobs from 1990 to 2007. I am keeping track of the arithmetic and so far we are up to 28.3 million new jobs, with about 3.7 million more to go. Count nearly 873 thousand new jobs in transportation and utilities with most of the increase in trucking and a new growth industry, warehousing and storage, but some losses in utility services. Add another 797 thousand new office jobs in religious and non-profit organizations. Add 128 thousand jobs for waste management and subtract 469 thousand job reductions in the federal government to account for all the service job changes from 1990 to 2007. Finally 2.35 million new construction jobs. Construction is the only non-service industry with more jobs but it does not make up for losses of manufacturing, agriculture, mining and utility jobs. There we have America’s 32 million new service jobs since 1990: the good, the bad and the ugly.
Toughing it Out
Americans continue to work like demons and spend like maniacs. Given the prevailing attitude toward work and jobs, there is no other choice. Everyone is expected to be productive and support themselves, no matter how good, or how bad the available jobs. The self-support requirement puts enormous pressure on individuals and families when productivity gains eliminate jobs at the same time a growing population and new immigrants put more and more people in the workforce.
The popular media likes to quote politicians and their critics who characterize some government programs as pork, or pork barrel spending. In America, one guy’s pork is another guy’s job and even though that has always been true, we are now a society where restaurants, gambling, pet care, landscaping, prisons, child care, and loans and credit cards support millions of jobs, but also a growing share of America’s work. These are the jobs we invent when efficiency reduces the need for labor in agriculture, mining, manufacturing, but more and more for jobs at utilities, information services, and finance. Maybe we should not call them pork, but they do not look like the high technology, high skills, advanced degree jobs advocates of the free-for-all predict for the future.
The jobs we invent are fewer than the jobs we preserve through old habits and practices. BLS reports 23.3 million office and administrative support jobs as clerks, secretaries, receptionists and bookkeepers. The total is holding steady since late 1999 in spite of digital technology and office automation. Customer Service Representative is also one of those administrative support occupations. It holds 8th place among America’s occupations with 2.2 million total jobs in nearly every sector of the economy, but especially in finance and insurance.
Customer Service Representative gets media attention because America’s corporations outsource some of this work to India and other countries. Many regard outsourcing as the action of ruthless corporate tycoons ripping the heart out of America, but allow me to suggest outsourcing is very much a domestic issue. Over 80 percent of Customer Service Representative jobs are reported for the country’s metropolitan areas, where millions commute by car and donate thousands of hours of their time using up gasoline and wearing out their cars so that others might work. Unlike production workers who must work at factories, customer service work can be anywhere with a computer and a telephone, as the companies themselves have so definitely proved. Doing computer work from home as telecommuters not only reduces jobs in the car industry, car repairs, gasoline, cement, and highway construction, but also for jobs in real estate, office rental, building maintenance, building repair and local government. Telecommuting could save business and society many costs; it will also eliminate many jobs.
Nobody knows for sure how many jobs go abroad to outsourcing because no one has anything but anecdotal data. At BLS they have a building full of people producing American data, but they do not produce data for jobs lost abroad. Individual businesses know their own situation, but as everyone producing data can tell you, business does not like sharing data with competitors, nor the inquiring public.
But why look abroad when there are so many ways for business and consumers alike to adopt new habits and new technologies to eliminate jobs and reduce work right here in America? Americans often think of their jobs as a personal achievement in a rough and tumble free-for-all of personal competition: a survival of the fittest.
Instead, our collective willingness to spend all our money as fast as we can, along with our collective willingness to invent new work and cling to old inefficiencies has kept the job mill going over the last 15 to 20 years, but it will get tougher. America needs some new attitudes and some new policies. It is time to rethink the full time work week, overtime pay, the minimum wage, union recognition, the payroll tax and health care tied to jobs among many job issues. But these are topics for another article.
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