West Virginia Jobs 2016

West Virginia Jobs 2016

West Virginia lost 11 thousand jobs during the recession that ran from the fall of 2008 until spring of 2010, but recovered those losses by 2012 when statewide employment reached its high of 765.2 thousand jobs. However, since 2012 statewide employment has declined by 17.4 thousand jobs to 747.8 thousand jobs in 2016. Even though jobs recovered to their pre-recession totals, the recent decline leaves West Virginia with a 2.3 percent loss of statewide employment. That makes West Virginia one of nine states with a loss of jobs since the 2008-2010 recession. Only two states had a bigger percentage loss of jobs than West Virginia. Those losses came even though national employment increased from 132 million to just under 138 million jobs during the same years.

After reaching a statewide high in 2012, West Virginia had a decrease in jobs in the lumber and mining industries, construction, manufacturing, wholesale-retail trade, financial activities, and a combination of repair and maintenance services, personal services, and non-profit associations. By 2016 the combined loss in these sectors was 26.3 thousand jobs.

Health Care, Government, and private education offset some of the losses with 6.9 thousand new jobs. An additional 700 hundred jobs in transportation and warehousing, a hundred jobs in information services, 800 jobs in business and professional services, mostly support services, and 400 jobs in restaurants bring the total job gains to 8.9 thousand jobs for those industries with any new jobs. Combining the gains of 8.9 thousand with the losses 26.3 thousand accounts for the net loss of 17.4 thousand jobs.

The prospects for job growth remain poor.

Back in 1990 West Virginia had 34 thousand jobs in lumber and mining, mostly coal mining, which was 5.4 percent of statewide employment. It was still 34 thousand in 2012 but the total was down to 4.4 percent of statewide jobs. By 2016 only 20 thousand jobs remained with a 2.7 percent share of statewide employment. Almost all of the job loss in lumber and mining came in the last four years. The sudden loss of jobs makes the decline more noticeable, but a 2.7 percent share for lumber and mining keeps West Virginia well above the national percentage of 1.7 percent for these jobs. There are only 50.3 thousand coal mining jobs left in the entire United States and they continue to fall month to month. West Virginia will not be able to hold onto its current coal jobs, much less increase them.

West Virginia has a smaller share of statewide employment than the national economy in all but three industry sub-sectors: health care, government service for the federal, state, and local government, and repair, maintenance, and personal services. Combined these three industries have 43.8 percent of West Virginia employment. Combined health care and government service had a 1.5 percent increase in the share of statewide jobs from 2012 to 2016. Only three other sub sectors had any percentage increase – business support services, private education, restaurants – and their total increase was .7 percent less than half of the health care and government increase.

West Virginia continues to lose jobs in all the same sectors as the national economy, but does not generate more jobs in the sectors doing well in the national economy. For example, professional and technical services have 6.2 percent of national jobs, but only 3.3 percent in West Virginia. In the national economy professional and technical services provide a major source of new jobs adding 30 to 60 thousand jobs a month, but in West Virginia the total has remained at or below 25 thousand jobs for over a decade with no growth.

In the national economy leisure and hospitality, especially restaurants, provide a major source of new jobs. They are often low paid jobs, but the West Virginia economy has not been generating many low paid jobs. Leisure and hospitality have only 9.9 percent of statewide employment, a percent below the national average. Worse their 2016 employment in this sector has not budged above 74 thousand jobs in the last four years.

In the national economy administrative support services provide a major source of new jobs. Administrative support services have 6.3 percent of jobs in the national economy but only 4.6 percent in West Virginia. These are jobs at employment services, telemarketing bureaus, security and armored car services, janitorial services, landscaping and a few more. They were 32.4 thousand in 2012 that reached their statewide high in 2016, but still only 34 thousand jobs.

In the national economy government services have 15.4 percent of national employment, but 20.9 percent of statewide West Virginia employment. All three levels of government employment – federal, state, local – have higher shares in West Virginia than the national economy. In the national economy health care has 13.2 percent of national employment, but 15.4 percent of West Virginia jobs. With so many industries in decline new jobs in health care and government services elevate their relative importance to new heights.

Between 2012 and 2016 the Bureau of the Census reports West Virginia had a drop in statewide population of 25.5 thousand. Given the prospects for jobs, we might consider them the smart ones; they left. In a recent news story the Governor of West Virginia announced he was leaving the Democratic Party to join the Republicans. Soon after Trump came to cheer him on with a rant through his well worn list of personal grudges. He did not tell the crowd their only hope for new jobs and a better economy lies with health care and government service. A good policy for jobs would tax the rich to pay for infra structure construction and generate government service jobs, especially social services. Wild, miserable West Virginia.

State Health Care Employment 2016

State Health Care Employment 2016

Health care employment varies widely from one state to another. In the national economy establishment employment in health care has 19.1 million jobs, or 13.2 percent of national employment. California employs 2.183 million in the four health care sub-sectors of physicians services, hospitals, nursing and residential care and social services. California has the high while Wyoming is the low with only 24.8 thousand jobs working in the health care industry. The high percentage for health care in statewide employment is 17.3 percent in Massachusetts and the low 8.8 percent in Wyoming.

To allow for the enormous state population differences it is necessary to use employment per thousand population to compare state variation. Variations diminish but remain: California has 55.6 employed in health care per thousand population while Wyoming has 42.8 per thousand population and Massachusetts 90.5.

The high for health care employment per thousand population is 101 in the District of Columbia while the low is 39 in Nevada. There are 9 states with health care employment below 50 per thousand while 13 states have health care employment above 70 per thousand. The average is 61.3.

The five southern states - Alabama, Georgia, Mississippi, South Carolina, North Carolina – are among the nine low health care employment per thousand population states. The other four including Nevada are Utah, Wyoming and Hawaii.

The nine states above 70 jobs per thousand population have five of the six New England states – Maine, Vermont, Massachusetts, Connecticut, Rhode Island – and also close by New York and Pennsylvania are above 70 per thousand population as well. However the remaining six show less connection to location or population. They are the District of Columbia and Delaware in the east and North and South Dakota, Nebraska and Minnesota in the mid-west.

There are 32 states and the District of Columbia that took the Obama Care Medicaid option and 19 states that did not. All five of the low health care employment southern states mentioned above did not take the Medicaid option. Florida, Virginia, Tennessee and Texas did not take the Medicaid option either. While their health care employment was above 50 per thousand population, they were below the average; all four were between 50 and 55 per thousand population.

The remaining ten states that did not take the Medicaid option are scattered geographically and show a moderate correlation with employment per thousand population. The Pearson correlation coefficient between the Medicaid option (Yes = 1, No = 0) and health care jobs per thousand population in the fifty states and the District of Columbia equals .36, where 0 means random variation and 1 predicts exact variation.

If we think of health care employment per thousand population as a measure of state effort and commitment to health care, then there are some good signs. Every single state and the District of Columbia have a higher health care employment per thousand population in 2016 than in 2007, the last full year before the 2008 to 2010 recession. All the states are doing better. Four states have an increase over 20 percent and 12 more had an increase of 15 to 20 percent. However, the correlation between health care per thousand population in 2007 and 2016 is high, .98, meaning roughly the same relative differences between the states continue now as they were in 2007. While it is certain the Medicaid option helps health care employment the effect so far appears modest. The differences suggest a difference of state preferences reflected through fifty-one varied political systems, although the result does not necessarily reflect the popular will. We know there is money in politics as well as health care.

Ohio Jobs 2016

Ohio Jobs 2016

Ohio establishment jobs dropped from a high of 5.625 million in 2000 to 5.427 million in 2007 before the Bush recession cut employment further to 5.036 million in 2010 just as the recession came to an end. Ohio lost so many manufacturing jobs in the seven years from 2000 to 2007 it lost a statewide average of 197 thousand jobs a month even though national employment increased from 132 million to just under 138 million jobs during the same years. Note (1)

The recession ran from the fall of 2008 until spring of 2010, which makes 2007 the last full year before the 2008 to 2010 recession got started. The national establishment employment surpassed the pre-recession high in 2014. Ohio jobs finally climbed above its 2007 total in 2016 when jobs reached an average monthly total of 5.481 million, a total that surpasses pre-recession employment by 54 thousand jobs, or just 1 percent above 2007. Ohio ranks 39th in the percentage increase of statewide jobs above the pre-recession total. Nine states remain below 2007 totals. There were just 54 thousand new statewide jobs even though the Bureau of Census reports an increase in the Ohio population over 147 thousand.

National establishment employment reached 144.3 million in 2016, up 6.3 million jobs over 2007. The increase in national employment is a net increase because many industry sub sectors like manufacturing lost jobs. In Ohio, natural resources, construction, manufacturing, wholesale trade, retail trade, information services, financial activities, personal services, non-profit associations, and government services all lost jobs in the years 2007 to 2016. The total of jobs lost in these sectors equals 200.2 thousand. Since Ohio had a net increase of 54 thousand jobs, Ohio had 254.2 thousand new jobs in just a few sub sectors to offset the job losses.

To make up for job losses in declining industries assures that remaining industries will become especially important as a source of new jobs. Over the last two decades new jobs in the U.S. economy have come from a short list of industry sub-sectors and especially so in Ohio where new jobs came primarily from business and professional services, health care and leisure-hospitality.

Business and professional services have three components: 1. professional and technical services, 2. establishments that manage companies and enterprises, and 3. administrative and support services. In Ohio, two professional and technical services - computer design and related services and management and technical consulting – added 21.1 thousand jobs. The job gains in these two professional sub sectors offset job losses in other professional services like legal services, accounting and bookkeeping services, architecture and engineering services, and advertising and related services, which cut the net increase to 15.8 thousand professional jobs.

Management of companies and enterprises added 26.6 thousand jobs, an unusually large number. These are office jobs of holding companies and corporate, subsidiary and regional managing offices. In the national economy establishments managing companies make up 1.5 percent of employment, but 2.5 percent in Ohio. The 26.6 thousand new jobs raised the Ohio share of employment in this sub sector from 2.0 to 2.5 percent of statewide employment.

Administrative and support services including waste management added 11.5 thousand jobs, but 6.7 thousand of these jobs were in services to buildings and dwellings that includes janitorial services, landscaping, carpet cleaners and exterminators.

Health care added 107.6 thousand jobs primarily in physician services, hospitals and social services. Private school education added 22.3 thousand jobs and state and local government education another 4.4 thousand jobs. Leisure and hospitality added 50.2 thousand jobs, but with 75 percent of the jobs at restaurants: 37.3 thousand of 50.2 thousand jobs. Slightly 60 percent of new jobs in Ohio came from just two professional services, management of companies and health care. Including the jobs from leisure and hospitality adds another 20 percent. Add 8 percent more for private schools.

Those with college and professional degree skills specialized in computing, accounting, finance and health care have the best chance of finding self supporting work. Employment in health care tends to be widely dispersed geographically given the need for patients to visit doctors and clinics. Ohio has kept up well with health care employment and wisely took the Medicaid expansion. However, more and more of professional and technical services can be delivered electronically, which allows them to be produced and delivered from any other state. Electronic delivery of professional services puts the states in competition for these jobs. In the national economy professional and technical services make up 6.15 percent of jobs, but only 4.69 percent in Ohio in 2016. For the years from 2007 to 2016 Ohio ranks 30th for job gains in professional services among the fifty states and the District of Columbia.

The average annual growth rate of statewide establishment employment since 2007 comes to .11 percent, far below the national average. Jobs in services like retail, publishing, telecommunications, finance and real estate do poorly in the national economy, but they lag even more in Ohio. For those in Ohio with high school degree skills the options are few.

The limited number of service sectors generating a net increase of jobs significantly lowers prospects for statewide job growth. It guarantees that health care employment must grow for Ohio to have a statewide increase of jobs. Computer design and related service jobs in Ohio have 1 percent of statewide employment, up from .8 percent in 2007, but still only 59 thousand jobs. Computer design and related services have 1.5 percent of national employment. Otherwise restaurants will have to provide thousands of new jobs a year to maintain even modest job growth

The idea people can finish high school and find career employment or self-supporting work breaks down day by day while business has started complaining of labor shortages. Politicians suggest a few bromides, but they offer nothing to solve the dismal record of Ohio jobs.


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Note (1) All job and employment number citations are from the Bureau of Labor Statistics, United States Department of Labor, Current Employment Survey. No exceptions.

The Pathetic Case of Oklahoma Jobs

The Pathetic Case of Oklahoma Jobs

Oklahoma establishment employment reached a monthly average high of 1,677.8 million in 2015, but dropped to 1.652 million jobs in 2016. The annual rate of growth rate since 1990 is 1.2 percent, not great but not bad compared to the national average and other states. From 2000 to 2016 the annual rate of growth dropped to .59 percent, a fifty percent decline. Oklahoma jobs declined during both of the Bush recessions, which came after the first quarter of 2001 and the second recession after the third quarter of 2008. Jobs have recovered but it was 2013 before Oklahoma jobs reached their 2008 level.

Every county in Oklahoma voted for Trump. Since Trump promised jobs that might be one reason. While he has yet to follow through with any more than talk, the problem with Oklahoma jobs shows up in the most glaring fashion over the last four years from 2012 to 2016. Over those four years monthly establishment employment was up a grand total of 38 thousand jobs at a .58 percent growth rate. Downright pitiful.


Goods Production

Goods production includes mining and mining related jobs like oil drilling, construction and manufacturing. Mining had its largest employment in 2014 with 62.1 thousand jobs, but it was still less than 2 percent of statewide establishment employment. It dropped to 44 thousand in 2016. Construction added 7 thousand jobs from 2012 to 2016 while manufacturing employment dropped 7 thousand canceling the construction gains.

To be fair the decline in goods production employment over the last four years comes as part of a long term trend of more than two decades. Since 1990 goods production lost 4.3 percent of statewide employment; since 2000 it lost 2.5 percent. However the entire 2.5 percent loss came in the four years, 2012 to 2016.


The Service Industries with a net job loss from 2012 to 2016

Important parts of the Oklahoma service industry, representing slightly more than 30 percent of statewide employment, did poorly. Service industries did have a few more jobs, although a few services lost jobs over the four year period. The information services lost a thousand jobs. It has publishing including software and Internet publishing, broadcasting, telecommunications, data processing and a few more. The total of Oklahoma financial activities including banking, credit and real estate services added just one thousand jobs.

The combination of professional and business support services had a net increase of a 1 thousand jobs, an especially poor performance for a sector with just over 11 percent of statewide employment in 2012. Professional services has law firms, accounting firms, architecture and engineering firms, computer design and relation services, management and technical consulting services, advertising and related services, but these services added only 3 thousand jobs, which were offset by a loss of two thousand jobs in business support services. Professional services need people with college degree skills, but Oklahoma College graduates will have to leave Oklahoma to find these jobs.

The worst failure to create jobs comes with health care. Over the four year period 2012 to 2016 Oklahoma health care employment increased at an annual growth of .85 percent, when the national average over the same four years was 2.36 percent. Total health care job growth over the four years comes to just 7 thousand new jobs. Slightly less than half the jobs came in services that actually provide patient care: physicians services, outpatient care, hospital services, and nursing and nursing home care. The other half came in social assistance jobs mostly non-profit family services, community food and housing and emergency relief services.

If we combine the 15.1 percent of statewide employment in goods production jobs with the 31.5 percent of statewide jobs in information services, financial activities, business and professional services, private education and health care we have a combined loss of 7 thousand jobs for 46.6 percent of statewide employment.


The Service Industries with a net job gain from 2012 to 2016

The remaining 53.4 percent of statewide employment comes in wholesale and retail trade, leisure and hospitality, repair and maintenance services, personal services, non-profit associations, and government. Wholesale trade was up only a thousand jobs, but retail trade did well among services with 11 thousand new jobs. Transportation and warehousing added 5 thousand new jobs, but modal transportation did poorly: airlines lost a thousand jobs, trucking added only a thousand jobs.

Leisure and hospitality added 17 thousand jobs with 13.3 thousand of these jobs at full service and fast food restaurants. The highest annual growth rate in jobs for any Oklahoma industry over the four years came in full service restaurants: 2.63 percent, more than four times the statewide growth rate.

Repair and maintenance services, and personal services had no new jobs over the four years. Non-profit associations added a little over 4 thousand jobs and government had a net increase of 6.5 thousand jobs. It was a net increase because federal and state government jobs declined while local government employment was up almost 8 thousand job over the four years.


Reality Check

Oklahoma ranks 45th in statewide job growth over the four years 2012 to 2016. While the monthly average increase was only 38 thousand jobs, the two metropolitan areas, Oklahoma City and Tulsa, had 53 thousand new jobs over the four years. That means the rural areas that make up the balance of state employment lost 15 thousand jobs. All of the 7 thousand new health care jobs were in Oklahoma City and Tulsa, the net change in health care in the rural balance of state was zero.

The state legislature has apparently cut state income taxes along with corresponding cuts in services, especially education. Nothing assures Oklahoma residents will return their tax cut to the Oklahoma economy; the poor job performance suggests these funds left the state. The state legislature also had the opportunity to bring in federal dollars with Medicaid expansion offered during the Obama administration. Additional health care spending would create jobs and health services for state residents, especially the rural poor, but the legislature threw them away. Oil exploration creates less than 2 percent of statewide jobs for the environmental dangers it creates.

Just over 45 percent of new jobs over the last four years came in Leisure and hospitality and almost 80 percent of those jobs came in restaurant occupations such as cooks, waiters, waitresses, and combined food preparation and serving workers, including fast food. The later occupation, food preparation and serving workers, has the highest employment of all restaurant and food preparation jobs in the state of Oklahoma, 34,520. That is up from 28,650 in 2012, which equals a 4.77 percent annual rate of growth compared to the .58 percent rate for statewide employment mentioned above. These jobs have a median wage in Oklahoma of $18,080 as reported by the Bureau of Labor Statistics in its Occupational Employment files. It is the lowest median wage of 710 occupations reported for the state of Oklahoma; dead last.

Enough said.

Michigan Jobs 2014-2015

Michigan reached a monthly average high of 4.68 million establishment jobs way back in 2000, followed by a long slide to a low of 3.86 million jobs in 2010, a decline of 813 thousand jobs over the decade. Job growth returned in 2011 until average monthly employment reached 4.11 million in 2013, an increase of 241 thousand jobs over the three year period. Jobs are up for the first 9 months of 2014, but at a slower pace of increase with only 12.9 thousand new jobs for the new year.

Michigan Governor Rick Snyder took office January 1, 2011 and after the 2014 election will continue until the end of 2018. His first three years in office included a significant improvement on jobs where 241 thousand new jobs equals an annual growth rate of 2.04 percent, higher than the national job growth rate and higher than the growth rate of forty-five of the fifty states and the District of Columbia. His re-election to a new term gives a good chance to make a mid-term assessment on jobs.

Manufacturing

Michigan lost 422.6 thousand manufacturing jobs from 2000 through 2010 about 52 percent of the statewide decline in jobs. From 2010 to 2013 manufacturing employment increased from 474 thousand to 555 thousand, an increase of 81 thousand, or a third of the statewide increase in establishment jobs. The Michigan increase in manufacturing jobs was higher than any other state, even the five states that have higher non-farm employment than Michigan. As of 2013 manufacturing has 13.5 percent of statewide establishment employment compared to the national average of 8.8 percent.

Share Reversals – From Decrease to Increase

Manufacturing was part of the job reversals from 2010 to 2013. However, all three of the goods production industries, natural resource, construction and manufacturing, reversed from decreasing between 2000 and 2010 to increasing from 2010 to 2013. Goods production declined by 8.24 percent of statewide jobs over the decade ending 2010, but increased by 1.33 percent in the three years ending 2013.

Professional and business services are another group of industries that reversed direction in 2010 from a declining share to an increasing share of Michigan jobs. The professional and technical services component of these services have jobs in law, accounting, architecture, engineering, computer design, management consulting, scientific research, advertising, and veterinary services. Professional jobs were up from 222.8 thousand in 2010 to 260.7 thousand in 2013, an increase of 37.3 thousand jobs. The new jobs were up enough to raise their share of Michigan jobs by .57 percent to 6.3 percent by 2013, reversing a small decline from 2000 to 2010.

The administrative and support services component of professional and business services includes office and facilities support services, employment services, travel agencies, security services, and services to buildings and grounds. Administrative and support jobs were up from 242 thousand in 2010 to 284 thousand in 2013, an increase of 42 thousand jobs. The increase was enough over the three years to raise their share of Michigan jobs by .65 percent to 6.9 percent.

Percentage Share Reversals – From Increase to Decrease

When some industries have higher percent others must have a lower percentage, which guarantees other industries lost jobs or did not have enough new jobs to maintain their share of Michigan jobs. Job growth in health care, government and education faltered after 2010 even though these industries helped sustain Michigan employment with more jobs from 2000 to 2010.

Health care employment was up from 9.6 percent in 2000 to 13.8 percent of statewide employment in 2010, an increase of 4.2 percent, but health care lost a .11 percent of Michigan jobs by 2013. Government service including education dropped 1.85 percent of statewide employment from 2010 to 2013. The decrease includes a .96 percent drop in jobs for the public schools and universities.

Private school education also declined from 1.9 percent of statewide employment to 1.8 percent from 2010 to 2013. Combined public and private education was up by 1.7 percent to 10.5 percent of statewide employment in 2010, but after 2010 jobs dropped from 406 thousand to 384 thousand with a loss of 1.1 percent of statewide employment.

The New Direction

The new direction shows up primarily with an expansion of goods production, especially manufacturing, and professional and business services in exchange for less government services, health care, and education. Combined goods production and business and professional services increased from 27.6 percent of statewide employment to 30.2 percent in just three years. The combination of government services, education, and health care decreased from 32.3 percent of statewide Michigan employment to 30.1 percent from 2010 to 2013.

Jobs usually figure in elections. If that is true in the 2014 Michigan election then 2010 to 2013 job growth undoubtedly translated into positive votes for Governor Snyder. Job growth justifies his claim that Michigan’s job outlook improved during his first term.

If new jobs are a goal for newly elected politicians the safest strategy is to work for new jobs in all sectors of the economy. The Michigan mix of new jobs has a political component because the governor has taken steps to increase jobs in the private sector as he pressed for a reduction in government services, which have decreased jobs in government and education.

Lagging Service Sectors and Productivity

The expanded use of computers and digital technologies raises productivity and slows the growth of jobs across service industry sectors that make up a large share of Michigan jobs. For example, wholesale and retail trade made up almost 16 percent of jobs in 2000, but barely 15 percent now.

Productivity has also slowed the growth of other service industries like newspapers, broadcasting, phone services, and in financial services like banking, lending, insurance and real estate as America slowly shift to a paperless economy. Combined these sectors continue to have 21.3 percent of statewide employment but their slow growth, and sometimes decline, makes them an unlikely source for significant increase in the future.

Other small sectors like repair and maintenance services, transportation, utilities, arts-entertainment-recreation including gambling, accommodations including casino hotels, personal services and non-profit associations have small shares with a combined 9.4 percent of statewide employment in 2013, down about .15 percent from 2010. Gambling employment dropped a few hundred jobs to 7 thousand statewide jobs.

Government and education including private schools have 16.4 percent of statewide employment as of 2013, off 39 thousand jobs in the last three years. These remain an unlikely source of new jobs in the current political climate.

Restaurants reached their highest statewide employment in 2006 with 352.3 thousand jobs, but with moderate ups and downs it is 350 thousand in 2013 with 7.5 percent of statewide employment. The job changes over the last decade do not suggest restaurants will be a major source of future jobs, but it has been adding about 7 thousand jobs a year recently and may continue.

Health Care and Professional and Business Services

The combined total of the above service sector jobs comes to 54.6 percent, which leaves 45.3 percent of the remaining sectors as the most likely source of new Michigan jobs. Remaining sectors include health care with 13.7 percent of Michigan establishment jobs, professional and business services with 14.7 percent and goods production with 16.9 percent.

Michigan needs 80 to 90 thousand new jobs a year to sustain the growth of the last three years. Major sectors like trade and information services continue to lose percentage share and now education and government services are down for political reasons, which makes it essential to have replacement jobs from other sectors. To keep the job mill going health care, professional and business services, and goods production needs to grow a little faster than the statewide average to increase their share of jobs.

Michigan health care employment increased between 8 and 9 thousand jobs a year from 2000 to 2013, but the rate of increase has fallen below the statewide growth rate for the last three years. The pace of new jobs needs to increase so that Michigan adds 12 to 13 thousand health care jobs a year, which will help make up for other slow growth sectors. Michigan health care employment has 13.7 percent of statewide employment compared to 13 percent in the national economy, but it will be difficult for Michigan to meet its job needs unless it continues at 13.7 percent or ticks up toward 14 percent.

Professional and business services employment, which recall has the combination of professional and technical services, managerial establishments, and business support services, reached a statewide high in 2000 with 641 thousand jobs. It declined to a low of 501 thousand by 2009. Jobs started to increase the year before Governor Snyder was elected but has continued to increase to the present. The monthly average in 2013 was 602 thousand jobs.

Michigan professional and business services jobs were up between 32 and 35 thousand a years in the four year period. Except for legal services growth rates in these industries exceeded the statewide growth rate, often at double and sometimes at triple the statewide rate. Michigan already has 14.7 percent of its statewide employment in these industries when the national average is 13.6 percent, making it unrealistic to expect the pace to continue, but Michigan needs 20 to 25 thousand of these new jobs to keep pace for continued growth around 2 percent a year.

Goods Production

Goods production also reached a high in 2000 with 1.12 million jobs, but declined to a low of 597.6 thousand in 2009. Jobs started to recover before Governor Snyder took office, but 93 of the 98 thousand new goods production jobs came after he was in office.

Natural resources and mining was up a thousand jobs and construction was up 4 thousand jobs over the three years. While up is better than down both sectors have small shares of Michigan jobs. In the national economy natural resources employment is .64 percent, but in the Michigan economy it is only .2 percent. Natural resources has not added more than a thousand jobs a year in natural resources going back to 1990.

Construction jobs increased by 11 thousand to 132 thousand in the three years since 2010. Michigan has construction employment equal to 3.2 percent of statewide employment compared to the national economy where it is 4.3 percent. Construction needs just 3 thousand new jobs a year to keep pace with the current statewide growth rate. A good economy should be able to increase it to 5 or 6 thousand a year.

Motor Vehicles

That leaves manufacturing, the most uncertain variable in Michigan jobs. The Michigan increase in manufacturing jobs came primarily in motor vehicle and motor vehicle parts manufacturing with 36 thousand of the 81 thousand manufacturing increase. Another 29 thousand of the manufacturing jobs were in auto related primary metals, fabricated metals, and machinery manufacturing. Combined these auto related industries make up 80 percent of the Michigan manufacturing increase.

In spite of the national decline in manufacturing after 2000 and the national decline of more than a 100 thousand jobs in automobile manufacturing in the same period, Michigan still has more motor vehicle manufacturing jobs than any other state. In 2012, it had 39.1 thousand jobs making complete vehicles or the chassis and frame, which was 23.4 percent of national employment in this industry; in 2013 it was up to 42.4 thousand jobs, which was up to 23.8 percent of complete vehicle, chassis and frame manufacturing. Second place Ohio had barely 20 thousand of these jobs.

Michigan ranks sixth in motor vehicle body and trailer manufacturing with 6 thousand jobs, but this is the smallest segment of the industry.

Michgian is first in the biggest segment of the industry: motor vehicle parts manufacturing. Employment here was 109.7 thousand jobs in 2013, which was 21.6 percent of the national employment. Ohio was second again with 63.6 thousand jobs.

From 2012 to 2013 jobs in the three component motor vehicle industries added 42.8 thousand jobs in nationwide employment. Michigan had 10.9 thousand of the new jobs, or just over 25 percent of them. It was more than any other state. Since five states had a decrease in motor vehicle manufacturing employment, and 13 states had a decrease in auto parts manufacturing employment, Michigan is clearly making gains in competition with other states in motor vehicle manufacturing.

The benefits of job gains depend partly on wages. The Bureau of Labor Statistics now publishes wage distributions by state, by industry and by occupation. Production occupations make up 60 to 66 percent of jobs in motor vehicle manufacturing including assembly and parts manufacturing. The Michigan median wage for production workers in motor vehicle manufacturing was $22.92 in 2012 and was up to $23.69 in 2013. Wages were up as employment was up from 21,540 in 2012 to 31,450 in 2013.

For Michigan production workers in motor vehicle body and trailer manufacturing in 2012 the median wage was $17.64 but was down to $15.27 in 2013. Employment here is low with only 2,640 jobs in 2012 and 2,680 in 2013.

For Michigan production workers in motor vehicle parts manufacturing in 2012 the median wage was $19.67 but was down to $17.09 in 2013. Wages were down as employment was up from 56,910 in 2012 to 61,290 in 2013. However, the wage bill (wage x employment) dropped for production workers who had less wage income to put into the Michigan economy.

Bureau of Labor Statistics data allows comparison between Michigan and other states. Production occupations for motor vehicle manufacturing in 2013 exceed 1,000 jobs in 10 states, but seven of those states report median wages higher than Michigan and two states with median wages below Michigan.

Production occupations for motor vehicle body and trailer manufacturing exceed 1,000 jobs in 26 states, but nine states report median wages higher than Michigan and sixteen states have median wages below Michigan.

Production occupations for motor vehicle parts manufacturing exceed 1,000 jobs in 28 states, but three states report median wages higher than Michigan and 24 states have median wages below Michigan.

A Cautious Future

Michigan needs at least 80 thousand new jobs a year to meet statewide employment needs. The job shifts over the last three to four years make Michigan more dependent on selling exports to other states or countries and therefore more vulnerable to job losses in an economic downturn. Through the first 9 months of 2014 manufacturing is up 8.9 thousand jobs out of a statewide increase of 12.9 thousand. Motor vehicle and motor vehicle related manufacturing in fabricated metals and machinery manufacturing were up 9.1 thousand in the same period, which means other manufacturing industries have a net decline in jobs.

The narrow advance of jobs in the three industries motor vehicle manufacturing, professional services expect legal services, and employment services makes a future forecast hard to make. In the first 9 months of 2014 retail trade, financial services, education, health care, accommodations, repair and maintenance services, personal services, non-profit associations, and federal, state and local government all had small job losses. Michigan has a better outlook on jobs than it did in 2009 and 2010, but it needs a broader advance across more industries to be optimistic it will continue.

Wisconsin Jobs for 2011 and 2010

On April 2nd a year ago I wrote a 600 word piece on Wisconsin jobs through 2010. At the time Governor Walker delighted attacking and taunting state employees, but I recall part of his taunt was “I will create jobs in the private sector.” In 2010 the monthly average of statewide jobs was down 15.3 thousand from 2009. In 2011 the monthly average of statewide employment was up 11.9 thousand from 2010, not enough to replace the prior year’s losses and still 93 thousand jobs below the statewide average for 2000.

The 2011 Wisconsin increase was 40th of the 50 states and the District of Columbia. An increase of 11.9 thousand new jobs is an annual growth rate of .44 percent, less than half the national average. Alabama, Mississippi and Arkansas actually lost jobs as did Missouri and Montana, but none of the losers have as many jobs as Wisconsin. Utah with only 1.2 million statewide jobs managed to create more than 25 thousand new jobs. For a state like Wisconsin with 2.7 million jobs the 2011 increase was measly at best.

In the national economy three sub sectors of durable goods manufacturing in fabricated metals, machinery and automobiles generated a little over 200 thousand new jobs. Wisconsin was able to ride the wave of national increase by picking up 11 thousand durable goods manufacturing jobs with 9 thousand of the jobs in fabricated metals and machinery. Other manufacturing in Wisconsin nudged upward but with barely a thousand new jobs.

Otherwise there is not much good news to report on Wisconsin jobs. Construction employment dropped 4 thousand jobs with declines across all three construction sub sectors: building construction, heavy and civil engineering including highway construction and specialty trade contractors. Wisconsin construction employment in 2011 dropped to 3.3 percent of statewide employment. Even though construction employment is down in the national economy construction has 4.2 percent of national establishment jobs.

Private sector services did a little better with a net increase of 10.6 thousand jobs, but 6.9 thousand of the new jobs were in employment services and from temporary help services. Government employment was down 6.8 thousand with 2.2 thousand of the lost jobs in the public elementary and secondary schools.

The loss of government jobs pulled the annual growth rate in service employment down to .17 percent compared to 1.08 percent in the national economy. Private sector service jobs that exclude government losses did a little better at .6 percent a year but that was a third of the national growth rate in this category, which was 1.79 percent.

Lost service jobs in Wisconsin for 2011 covered a broad spectrum of industries in transportation, utilities, information services that include publishing, broadcasting, phone and Internet, along with losses in financial services in banking, credit, real estate, arts-entertainment-recreation, accommodations, restaurants, personal services like salons and laundries, and non-profit membership associations. Restaurants?

The total of losses in the private service sectors was a modest 6.8 thousand for the year, but Governor Walker promised more jobs, not less. Even though employment services including temporary help services added 6.9 thousand jobs, these jobs are part of a larger sub sector called administrative support services that includes services like telemarketing, security services, credit bureaus, janitorial and landscaping services and a few more. After excluding jobs from employment services and temporary help services the remaining support services lost jobs in 2011.

Wisconsin service sectors with more jobs had token gains and generally at growth rates well below the national average. For example, wholesale and retail trade added 2.4 thousand jobs in 2011, but that was a growth rate of .58 percent a year compared to 1.40 percent in the national economy. Health care employment inched up 3 thousand jobs, but here again the Wisconsin increase represents a growth rate of .83 percent when the national economy did much better at 1.63 percent.

Professional services like the law, accounting, computer design continues to be a smaller share of Wisconsin jobs than the national economy: 3.3 percent for Wisconsin, almost 5.9 percent nationally. Wisconsin added 1.6 thousand professional jobs in 2011 at an annual growth rate of 1.75 percent a year, but the same jobs were increasing at 3.36 percent a year in the national economy.

One other Wisconsin service sector picked up 3 thousand jobs, which came in a service sector called management-of-companies. This sector results from the use of establishments to report job data because a firm may have many establishments at different locations where some establishments within the firm might be just head offices or administrative offices. Unfortunately the management sub sector is a small sector even though the increase here is a little above the national growth rate.

Based on the Bureau of Labor Statistics data cited above, the private sector job performance equals failure on the governor’s private sector pledge to create jobs. Job gains in manufacturing give optimists a reason to feel better than last year, but Wisconsin depends on manufacturing for 16 percent of its jobs, which makes it vulnerable to changes in the national recovery. The poor performance in construction and private sector services does not suggest Wisconsin manufacturing will be able to pull the rest of the economy along.

Remove the 6.9 thousand new jobs from employment services and the 6.8 thousand jobs lost from government service and the net private service sector increase comes to 3.7 thousand jobs for all of 2011. If Wisconsin private service sector job growth equaled the national average, Wisconsin would have had 20.5 thousand more private sector service jobs in addition to the manufacturing gains.

Being somewhat acquainted with the vitriol and class divisions in Wisconsin politics I wonder if there are more than a few voters hoping jobs will decline. Those people will vote for Governor Walker, but the Wisconsin voters who work should remember that neighboring Minnesota, Illinois, Indiana and Michigan all did significantly better than Wisconsin on jobs in 2011.

Wisconsin Jobs and Governor Walker

Governor Walker needs new jobs more than most governors given the controversies over deficit reduction and public employees. The governor’s plan to create private sector jobs sounds like lots to expect from deficit reduction and business tax cuts, but the Bureau of Labor Statistics publishes enough about jobs to assess his chances for success.

Wisconsin reached a monthly average high of 2,884,400 establishment jobs in 2007, but it had 2,833,800 jobs in 2000. In 2010 the monthly average of statewide employment was down to 2,725,900, an average that is off by 107,900 jobs since 2000. The decline in jobs came as a net decrease of 128,500 private sector jobs and a 20,700 net increase in public sector jobs.

Like most states Wisconsin has a decline in manufacturing jobs. In 1990 it held fifth place for states with 22.8 percent of statewide jobs in manufacturing. It reached first place in 2009 even though manufacturing jobs dropped to 15.7 percent of Wisconsin establishment jobs. Now manufacturing jobs are down 165,300 from the high of 594,700 in the 1990’s.

Wisconsin has the best record of states in limiting manufacturing job losses, yet it still needs 165,300 new jobs to replace jobs lost in manufacturing. That will be difficult because some Wisconsin services have a decade long record of decline. Wholesale and retail trade, utilities, information services that include publishing, broadcasting, phone and Internet, real estate services, and repair-maintenance services show a modest but steady decline in jobs and declining percentage of Wisconsin jobs from 2000 to 2010.

Higher labor productivity limits manufacturing jobs but labor saving computer technologies have limited jobs in service industries like wholesale and retail trade. The use of computers for barcodes, inventory management and Internet sales raise sales per work hour and limits jobs. Digital technologies allow Craigslist to supply free classifieds with a few dozen out of state jobs, while netflix knocks out jobs at video stores. Higher quality for automobiles, appliances and machinery limits the need for repairs and the need for repair jobs.

Wisconsin job losses occurred in 11 industry sectors defined and reported by the Bureau of Labor Statistics. Combined these sectors dropped 8 percent of Wisconsin jobs from 2000 to 2010: 55 to 47 percent. While some jobs in construction or transportation should recover in a stronger economy, jobs already decimated from computer technologies and higher labor productivity and with a decade or more of decline will not recover their previous share of Wisconsin jobs.

Percents must total one hundred which guarantees an 8 percent loss equals an 8 percent gain for other industries. Expect new jobs to come from the limited number of services that had higher growth over the last decade. Health care picked up 73 thousand jobs, which were more new jobs than all other private sectors combined. Health care, government jobs including education combined with private education jobs many at colleges were the big gainers since 2000. These three accounted for over 70 percent of the 8 percentage gains over the last decade. The remainder of replacement jobs came from selected professional and financial services, accommodations, restaurants, personal services like salons and laundries and non-profit membership associations.

The governor’s plan eliminates government as a source of new jobs, but health care also needs government support, which the governor apparently opposes. Tax incentives to generate investment capital are risky for creating state jobs because the funds might leave Wisconsin for investment elsewhere.

People in Wisconsin should ask themselves, “Where will I work in the economy the governor wants to have?” I confess it might be in another state.

Texas Jobs

In the Time magazine April 4, 2011 issue on page 20 you will find a story “Where the Jobs Are.” There is a U.S. map with a red line pointed to the state of Texas. The caption reads Texas added 211,800 jobs in 2010.

I checked the Bureau of Labor Statistics, Current Employment Survey file for statewide Texas jobs and found the numbers to compute the increase. As Time reported Texas establishment jobs were up 211.8 thousand for the 12 months ending December 2010.(1)

Citing the 12 month increase when jobs are going up generates a larger number than comparing another commonly cited figure: the monthly average of jobs for the year. Texas reached its highest monthly average of 10.6 million establishment jobs per month in 2008. Jobs declined to 10.3 million in 2009, but the monthly average improved by only 35 thousand in 2010.

Texas jobs from 2000 to 2010 are up by an average monthly increase of 910.4 thousand, a bigger increase than any other state. However, Texas also had the biggest increase in population in the same period, which was up 4.3 million between 2000 and 2010. Despite the new jobs, population growth was four times faster than jobs.

The figure Time magazine cites suggests a better future for Texas jobs, but the Bureau of Labor Statistics publishes 159 data series that give statewide details of Texas jobs by industry sector and sub sector. As the old saw goes the devil is in the details.

Texas had just under a million manufacturing jobs back in 1990, which was 13.3 percent of statewide employment. Only 811 thousand remain, which is now 7.8 percent of Texas jobs. The 5.5 percentage decline means Texas needs faster than average growth in service industry employment to make up for the declining share in manufacturing.

Trouble is higher productivity restricts jobs in services not just manufacturing. Computer technology limits jobs in wholesale and retail trade where the use of computers for barcodes, inventory management and Internet sales raises sales per work hour and limits jobs. Amazon computers put Borders books in bankruptcy as netflix knocks out jobs at video stores.

Craigslist offers free classified advertising with a few dozen out of state jobs while fewer and fewer bother with the Yellow Pages. More enjoy the convenience of on-line banking from their home computer while fewer drive to a bank to exchange paper with a teller. More use continuously updating Internet stock quotations instead of newspapers.

Services like wholesale and retail trade, newspapers, communications and finance including insurance and real estate dropped as a percentage of statewide jobs between 1990 and 2010, which makes them like manufacturing because they have to be replaced by a declining number of other services.

In all, 12 sectors defined by the Bureau of Labor Statistics lost 11 percent of Texas jobs from 1990 to 2010. Small share losses in natural resources, accommodations and personal services should recover with a better economy, but jobs lost to productivity gains and computers will not recover their previous share of Texas jobs.

The reality of shifting jobs between service sectors together with the long term decline in manufacturing limits the opportunities for Texas jobs. Percents must total one hundred which guarantees an 11 percent loss equals an 11 percent gain for other industries, but the sectors that gained a percentage of Texas jobs over the last two decades will have to continue to do so if Texas can meet its job requirements.

The biggest share of replacement jobs came in health care. Health care picked up 643 thousand new jobs equal to a 3.6 percent bigger share of statewide jobs. Public and private education jobs are up 485 thousand jobs over the last decade, 1.6 percent of statewide jobs. Texas has to support education and further health care expansion and concentrate on producing its health care needs within its borders to expect to meet the need for new jobs.

Private sector services in selected professional and business support services gained another 3.3 percent of Texas jobs. These include 280 thousand more jobs in careers like accounting, architecture, engineering, computer design, management consulting, and scientific research, but also business support services with 318 thousand new jobs in administrative and facilities services, employment services, temporary help services, telemarketing, security, janitorial maintenance, landscaping and a few more.

Professional services give a chance to bring in spending from outside Texas to support jobs with exported services. For 20 years growth rates nearly double the statewide average helped Texas meet its job needs with professional services. However, professional services are increasingly produced and delivered by computer as part of competition in the high productivity global economy. The reality of competition from other states and other countries makes it risky to expect above average job growth for professional services.

After professional services it was leisure and hospitality jobs including 401 thousand more jobs at restaurants that gained percentage share of Texas jobs. Construction, transportation, and repair services, mostly auto repair, also made small percentage gains.

Like so many other states, Texas jobs are shifting out of high productivity industries in the global economy and into low productivity industries in the local economy. Low productivity is the friend of jobs, but low productivity jobs can be divided into career jobs with generally self supporting salaries in health care and education and lower paid jobs in business support, leisure and hospitality as janitors, waiters, waitresses, maids, cashiers, ushers and ticket takers.

In politics the Democrats promise jobs and fail to deliver, the Republicans promise jobs and fail to deliver, and back and forth. Jobs are a long term problem. I reference 1990 and 2000 to emphasize that point. If Texas politicians want jobs they will need to put away their free enterprise slogans and develop some new policy for the long term. But that is a topic for another article.

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Note(1) All job and employment number citations are from the Bureau of Labor Statistics, United States Department of Labor, Current Employment Survey. No exceptions.

Ohio Jobs and Governor Kasich

Ohio Governor Kasich has picked a tough policy challenge for himself, but far more with jobs than politics. Ohio ranks second for statewide jobs losses over the last decade. Only Michigan did worse.

Ohio establishment jobs are down a monthly average of 603 thousand in 2010 compared to 2000. The Governor's plan to turn jobs around looks doubtful. In the mean time the U.S. Bureau of Labor Statistics publishes plenty about Ohio jobs to assess his chance for success. Note (1)

All of Ohio’s 603 thousand job losses came from the private sector. Ohio state and local government including public education is up by 5 thousand jobs, but losses to federal jobs in Ohio offset the gains. Ohio had 785 thousand government jobs in 2010, the same as 2000, even though statewide establishment jobs dropped from 5.6 to 5 million.

Ohio had just over a million manufacturing jobs back in 1990, which was 21.7 percent of statewide employment. Only 624 thousand remain, which is now 12.4 percent of Ohio jobs. The 9.3 percentage decline means Ohio needs faster than average growth in service industry employment to make up for the declining share of manufacturing.

Trouble is higher productivity restricts jobs in services not just manufacturing. Computer technology limits jobs in wholesale and retail trade where using computers for barcodes, inventory management and Internet selling raises sales per work hour and limits jobs. Amazon computers put Borders books in bankruptcy as netflix knocks out jobs at video stores.

Craigslist offers free classified advertising with a few dozen out of state jobs while fewer and fewer bother with the Yellow Pages. More enjoy the convenience of on-line banking from their home computer while fewer do paper transactions with Ohio’s 21 thousand remaining bank tellers. More use continuously updating Internet stock quotations instead of newspapers.

Computer technologies helped decimate trade jobs in Ohio, which declined 144 thousand since 2000. Information services like newspapers and communications and finance including insurance and real estate lost another 56 thousand jobs with them. Worse these services are like manufacturing because they have a declining percentage of Ohio jobs that have to be replaced by a declining number of other services.

In all, eight industry sectors defined by the Bureau of Labor Statistics lost 8.6 percent of Ohio jobs from 2000 to 2010. Small share losses in construction, utilities, and transportation should recover with a better economy, but jobs lost to computers will not recover their previous share of Ohio jobs.

The biggest share of replacement jobs came in health care. Health care picked up 134 thousand new jobs equal to a 4 percent bigger share of statewide jobs. Government jobs including education did not increase, but government jobs excluding education picked up 1 percent of Ohio jobs. Even though public education jobs are off slightly, private education more than made up the difference. Public and private education jobs are up 1.1 percent of statewide jobs over the last decade.

A service sector defined by the Bureau of Labor Statistics to report jobs for offices of holding companies and corporate, subsidiary and regional managing offices added 23 thousand jobs, a .6 percent share increase. Ohio has lost so many jobs there were small percentage gains for utilities, transportation, selected professional services, accommodations, restaurants, and personal services even though all these services lost a few thousand jobs from 2000 to 2010.

Governor Kasich plan cuts spending and jobs in the principal sectors that did well enough to relieve the misery of statewide job losses over the last decade. Free enterprisers like Governor Kasich ignore the shift out of high productivity employment and the necessity of looking for anything leftover. Increasingly what is left are jobs in health care, education, government and a smorgasbord of low productivity services in accommodations, restaurants, business and personal services.

More health care means more jobs. Ohio desperately needs to keep its manufacturing jobs, but Governor Kasich and the Washington establishment ignore jobs moving abroad in search of cheap labor. Ohio has many jobs left to lose. Gains will be harder, especially with Governor Kasich on the attack.

Note (1) All job and employment number citations are from the Bureau of Labor Statistics, United States Department of Labor, Current Employment Survey. No exceptions.

Michigan Jobs

A Comprehensive Review and Analysis of Michigan Jobs (2,175 words)

The dismal state of the Michigan job market continues to be a topic of news and politics. Michigan jobs trended upward through the 1990’s reaching a monthly average high of 4.68 million establishment jobs in 2000, which turned out to be the beginning of a continuous decline. Note (1) By 2009 monthly average jobs were down to 3.88 million, a drop of 70 thousand jobs from 1990 to 2009, and a drop of 800.1 thousand jobs from 2000 and 2009.

Michigan is the only state with a decline in statewide employment from 1990 to 2009. The decline between 2000 and 2009 is the biggest drop among all 50 states and the District of Columbia and the biggest percentage decline, 17.1 percent. Michigan jobs are still dropping, down 32 thousand for 2010 through October.

Given the reality of Michigan labor markets it is not surprising that candidates for state office in the November election typically discussed plans for new jobs, and sometimes in confident tones. Such a long slide makes it hard to blame one party, or one policy, but either party that holds elected office will want to improve the outlook on jobs. Let’s review their circumstance and weigh their prospects for success.

Manufacturing

Michigan had 839 thousand manufacturing jobs in 1990. In the early 1990’s manufacturing jobs dropped briefly below 800 thousand, but ended the decade with a high for manufacturing in Michigan: 898 thousand jobs. By 2009 manufacturing jobs were barely 462 thousand, a loss of 376.6 thousand jobs from 1990 to 2009 and a loss of 435 thousand jobs after 2000.

Even though Michigan suffered heavy manufacturing job losses other states had the same problem. In 1990, Michigan manufacturing employment ranked 10th among the 50 states in percentage of statewide employment with 21.3 percent of statewide jobs. North Carolina ranked first with 26.4 percent of statewide jobs in manufacturing.

Even though North Carolina began to lose manufacturing jobs sooner than Michigan, North Carolina went from 824 thousand manufacturing jobs in 1990 to 447 thousand in 2009. The North Carolina drop of 376.2 thousand jobs is almost identical to the Michigan manufacturing loss of 376.6 thousand in the same years, 1990 to 2009.

North Carolina relied on the Textile industry in similar fashion as Michigan relied on the automobile industry. North Carolina lost 240 thousand textile industry jobs between 1990 and 2009, whereas Michigan lost 208 thousand automobile jobs in the same period. Even though Michigan manufacturing job losses are severe they do not look worse than North Carolina, yet Michigan lost 800.1 thousand statewide jobs from 2000 to 2009 while North Carolina was able to maintain statewide employment in the same period at 3.9 million jobs.

High Productivity Services

Both Michigan and North Carolina need new jobs to replace their lost manufacturing jobs before they can add jobs. That means both states must have faster than average growth in service industry jobs to make up for the decline in manufacturing. Trouble is there are major sectors of the service economy where the jobs don’t grow, or grow too slowly to maintain their share of statewide jobs.

For example, wholesale and retail trade jobs in Michigan declined by 54 thousand from 1990 to a low of 604 thousand in 2009, a loss of 1.1 percent of statewide jobs. Using computer technology in trade, especially for barcodes and inventory management and for Internet sales, increases labor productivity. Retail and wholesale sales volumes per work hour are up and sometimes at rates comparable to productivity in manufacturing.

The expanded use of computers and digital technologies has raised productivity and slowed the growth of jobs in information services like newspapers, broadcasting, phone services and in financial services like banking, lending and insurance as America slowly shift to a paperless economy. The share of these jobs decline as America and Michigan gets more news from the Internet, and electronic banking replaces driving to the bank to exchange paper with a teller.

Health Care, Education and Professional Services

From 1990 to 2009 when Michigan lost 70 thousand jobs, Michigan’s declining sectors lost 475 thousand jobs. The declining sectors guarantee that the difference of 405 thousand jobs shifted to other sectors of the Michigan economy, especially health care, education and professional and technical services.

Health care including social services in the national economy continues to create more jobs month after month where it now has 12.5 percent of America’s establishment jobs. The recent expansion of health care insurance passed by Congress will help the states generate new jobs. Michigan health care has 160 thousand new jobs since 1990 with 13.7 percent of statewide jobs, above the national average and up from 9.4 percent.

Education employment for public and private elementary, secondary and post secondary education continued to grow from 1990 to 2009. Michigan reached a peak of 437 thousand jobs in the years from 2003 to 2005 and then dropped back to 421 thousand in 2009. The share of education in statewide jobs continued to go up reaching 10.9 percent in 2009, even though 2009 education totals are up only 61 thousand jobs since 1990.

Professional and technical services have jobs in law, accounting, architecture, engineering, computer design, management consulting, scientific research, advertising, and veterinary services. Michigan increased professional services jobs between 1990 and 2009 going from 202 thousand to 221 thousand jobs. The 2009 total is 5.7 percent of statewide employment, just equal to the national average in professional services jobs. Michigan needs to expand these services but professional service jobs are down from a high of 276 thousand in 2000 to 221 thousand in 2009.

Low Productivity Services

Health care, education and professional services accounted for 240 thousand of the 405 thousand of the jobs that shifted from declining sectors from 1990 through 2009. The remaining 165 thousand of the 405 thousand replacement jobs shifted into local business support services and leisure and hospitality services, where low productivity helps maintain jobs that pay modest wages.

There were 92 thousand replacement jobs shifted to business support services with jobs in administrative and facilities services, employment services, temporary help services, telemarketing, security, janitorial maintenance, landscaping and a few more. These new jobs are a 2.5 percent increase in the share of Michigan jobs between 1990 and 2009.

An additional shift of Michigan jobs were scattered into leisure and hospitality services such as accommodations, restaurants, performing arts, spectator sports, amusement parks, casinos, golf and country clubs, fitness and recreation centers, selected personal services, and a broad category of non-profit associations that includes foundations, advocacy and civic groups, professional associations and a few more. The total of these replacement jobs come to 73 thousand from 1990 to 2009.

Michigan vs. North Carolina

North Carolina avoided a general decline in statewide employment that plagues Michigan. North Carolina and Michigan had about the same performance in jobs from 1990 to 2000. Differences show up in the period from 2000 to 2009 when North Carolina did better in health care adding 131 thousand jobs and better in education adding 79 thousand jobs. Michigan added only 83 thousand health care jobs and 8 thousand jobs in education. North Carolina did better in professional services adding 31 thousand jobs; Michigan was down 55 thousand professional service jobs in the 2000 to 2009 period.

Otherwise North Carolina maintained itself with local services jobs and by adding 48 thousand jobs in state and local government, excluding education. Michigan had a decline of 14 thousand state and local government jobs excluding education from 2000 to 2009 and much bigger losses in trade, which dropped 141 thousand jobs compared to a loss of only 13 thousand jobs in North Carolina. Even though Michigan has gambling and gambling jobs and North Carolina does not, Michigan lost 19 thousand jobs in leisure and hospitality; North Carolina gained 66 thousand leisure and hospitality jobs.

North Carolina has 448 thousand manufacturing jobs left after losses every single year since 1995; 462 thousand manufacturing jobs remain in Michigan. Both states needs these jobs, but other states want them, the Federal government continues to ignore manufacturing moving abroad and rising labor productivity continues to limit jobs. In the last decade, North Carolina did better than Michigan generating more service jobs buying and selling within their state than Michigan was able to do. In spite of the difference both states have a declining share of manufacturing jobs and a growing share of jobs in local services.

Reality Check

The reality of shifting jobs between service sectors together with the long term decline in manufacturing limits the options for Michigan jobs. As of 2009 35.2 percent of Michigan jobs remain in manufacturing and the service sectors decimated by higher labor productivity and the use of computer technologies. Even though jobs in wholesale and retail trade are restricted from higher labor productivity, the Michigan loss of 141 thousand trade jobs between 2000 and 2009 is especially high. Michigan must do better in trade to have a chance at job growth.

Politicians seldom advocate government jobs as a solution to job needs, but Michigan cannot afford to sit by and let these jobs decline, no matter how unpopular taxes and spending come to be. Government jobs are spread out geographically and help maintain a core of jobs in many communities. If these jobs decline, other jobs will decline with them.

In Michigan and North Carolina, like other states all over the country, jobs are shifting out of high productivity industries and into low productivity industries like leisure and hospitality and personal services. Low productivity is the friend of jobs, but few politicians want to brag about new jobs in leisure and hospitality as waiters, waitresses, maids, cashiers, ushers and ticket takers. Low productivity jobs tend to have low pay and families need two or three of these jobs to pay the bills and survive.

The state legislatures and the governors of Michigan and all states will need to support health care expansion and concentrate on producing as much health care within their respective states as possible if they expect to meet the needs of new jobs. Think of more health care and job growth as the same.

Public education has helped provide new jobs in Michigan for nearly 20 years, which needs to continue if Michigan wants jobs. In the last few years private schools have added jobs while local public school are down more than 40 thousand jobs since just 2004. Private schools and all the state’s colleges have a chance to bring in out of state students and create jobs.

Professional services give a chance to promote services and jobs that brings in spending from outside the state to support jobs with exported services. Health care and education tend to be local services, whereas professional services are increasingly produced and delivered by computer in the global economy. Michigan must expand professional services if it expects to have more jobs.

Combine the 35.2 percent of high productivity sectors where jobs decline with the low productivity sectors where the wages are low, add in government jobs excluding education, and the total comes to 63.3 percent of Michigan jobs. Jobs in health care, education and professional services account for another 30.3 percent of Michigan jobs in 2009, but the percentage has to increase for these jobs to replace the declining sectors. The alternative is more low paid jobs in low productivity services.

Just three other sectors remain with 6.4 percent of Michigan jobs: natural resources, construction, and transportation with public utilities. All are in decline with fewer jobs now than in 1990 and fewer than 2000. Natural resources, which is logging and mining, has 7 thousand jobs left. Construction and transportation and utility jobs are also off from 1990 and 2000. Construction is down from a high of 210 thousand jobs to a monthly average 118 thousand for October of this year.

Michigan politicians make broad promises to create jobs that will be hard to keep. If they concentrate on health care, education, and professional services and bolster the sagging trade sector, then new jobs could generate enough income and spending to boost employment in the supporting sectors. If they review state tax incidence and the financial sector they might be able to make changes that keep more Michigan generated savings and profits in Michigan for reinvestment and job growth. If they revise Michigan labor law, especially overtime rules, they might be able to spread the work to more people and lower the unemployment rate.

Jobs are a long term problem. I deliberately reference 1990 and 2000 to emphasize that point. In our politics the Democrats promise jobs and fail to deliver, the Republicans promise jobs and fail to deliver, and back and forth. They fail because they look for a quickie solution and pursue some other agenda. Michigan could be different. Your job will depend on it.

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Note(1) All job and employment number citations are from the Bureau of Labor Statistics, United States Department of Labor, Current Employment Survey. No exceptions.

Maryland and Virginia

First published in the Washington Herald Telegraph

Jobs and the Plight of the Maryland and Virginia Governors

Both of the incumbent governors in Virginia, and Maryland have staked their political plans and reputation on creating more jobs. In Virginia, Governor Robert McConnell has pledged to make jobs his top priority while in Maryland Governor Martin O’Malley is defending his record and priorities on jobs. Given the well published need for jobs their promises are easy to understand, but let’s weigh the prospects for success.

Virginia reached its highest monthly average of 3.76 million establishment jobs in 2008 whereas Maryland reached its highest monthly average in 2007 with 2.61 million jobs. Both had declines for 2009 from their previous average highs. In Virginia, jobs were off by a monthly average of 126,000; for Maryland jobs were off a monthly average of 87,000.

The jobs picture is not improving yet (June 2010). The 2010 monthly average of seasonally adjusted jobs through May dropped another 19,000 in Virginia and by another 16,000 in Maryland. To be fair to the governors though, the last decade has not been a good decade for jobs and both governors face similar problems creating jobs.

Both states have well publicized job losses in manufacturing, but the decline goes back many years. Virginia has a loss of 148 thousand manufacturing jobs since 1990. Maryland is down 80 thousand in the same period. For Virginia manufacturing was 13.4 percent of statewide jobs in 1990, but only 6.6 percent by the end of 2009. In Maryland manufacturing accounted for 9.1 percent of statewide jobs in 1990 but only 4.7 percent now.

Both states need new jobs to replace their lost manufacturing jobs before they can add jobs. That means both states must have faster than average growth in service industry jobs to make up for the decline in manufacturing. Trouble is there are major sectors of the service economy that are not growing at all, or growing too slowly to maintain their share of statewide jobs.

For example, wholesale and retail trade accounted for 383 thousand jobs in Maryland for 1990 but 364 thousand trade jobs in 2009. In Virginia trade jobs were 474 thousand jobs in 1990 and 511 thousand in 2009, but the 2009 total is 14 percent of statewide jobs compared to 16.4 percent in 1990. Both states show a continuously declining share of statewide jobs in trade.

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 limits job growth.

The use of digital technologies and business consolidation has affected labor productivity and jobs in other service industries. In addition to manufacturing and trade Maryland and Virginia have a nearly identical group of service industries that have a twenty year record with a declining percentage of jobs. Include mining, utilities, information services such as publishing, broadcasting, and communications, banking, real estate, and repair and maintenance sectors as service industries losing share in statewide jobs. Maryland’s declining industries lost 10 percent of jobs since 1990. In Virginia the losses are 11.4 percent.

Shares must total 100 percent, which assures a higher percentage of jobs in a shrinking number of other services. These other services are health care especially, along with education and selected professional services, particularly computing. Business support services and restaurant jobs show gradual increases, but they are hardly the services that governors want to promote when they discuss new jobs.

Health care including social services continues to create more jobs month after month in the national economy where it now has 12.5 percent of establishment jobs. The recent expansion of health care insurance passed by Congress will help the states generate new jobs. Virginia lags behind in health care jobs with only 10.1 percent of statewide employment. Maryland health care has 12.7 percent of statewide jobs, slightly above the national average, but both governors will need to support health care expansion and concentrate on producing as much health care within their respective states in order to meet their employment goals.

Education like health care has a 20 year record of steady growth in jobs. Maryland jobs in private and public education are now just over 11 percent of statewide employment, above the national average. Education and health care are both sectors where computer technology and the digital revolution have limited ability to raise labor productivity compared to service sectors like finance and communication. Even though many people write checks and do their financial business with paper, the wider use of digital technology could further erode employment in finance, insurance and communications.

Both states have a third service sector with a continuously higher share of jobs: combined business and professional services. Virginia has the best record here with a 4.4 percent jump in professional service employment from 5.9 to 10.3 percent of statewide jobs from 1990 to 2009. Virginia has been able to attract computing design services, which jumped from 45 thousand jobs in 1990 to 137 thousand jobs by 2009.

Maryland has also done well with professional and business service jobs, which are up to 224 thousand in Maryland for 2009, but only 8.9 percent of statewide jobs. Like Virginia, computer design services have the most jobs in professional services, but 60 thousand jobs compared to 137 thousand for Virginia.

Virginia has also been successful in bringing corporate headquarters to northern Virginia. Jobs in the management of companies reached a high of almost 77 thousand in 2008, an impressive total with 2 percent of statewide employment, higher than the national average. Maryland has 20 thousand jobs in this category.

The professional service part of business and professional services has jobs in law, accounting, architecture, engineering, computer design, management consulting, scientific research, advertising, and veterinary services. The business services part has supporting jobs in administrative and facilities services, employment services, and support services in telemarketing, security, janitorial, landscaping services and a few more.

Professional services have the best chance of any services to be sold in other states and in the global economy. Business support services along with health care, education and so many service industries tend to be local services, whereas professional services give both governors a chance to promote services and jobs the bring money from outside their states to support jobs with exported services.

The reality of shifting jobs within the service industry along with the long term decline in manufacturing limits the options of both governors. If they can generate economic activity and jobs in health care, education, and professional services then these should pull along additional jobs in business support services along with leisure, hospitality, and personal service jobs.

Federal, state and local government jobs in both Maryland and Virginia continue to be the biggest employers in both states. Governments have 19.2 percent of Virginia jobs in 2009 including public education; 19.5 percent of Maryland. Politicians seldom advocate government jobs as a solution to job needs, but neither governor can afford to sit by and let these jobs decline, no matter how unpopular taxes and spending come to be. State and local jobs are spread out geographically and help maintain a core of jobs in many communities. If these jobs decline, other jobs will decline with them.

Both governors will need to maintain construction jobs, but neither can expect there will be enough new construction jobs to help much with statewide job needs. Construction employment in the national economy fluctuates around 5 percent year in and year out. It has not gone above 6 percent in the national economy since the 1940’s.

Both Virginia and Maryland are already doing about as well with construction jobs as any state could expect. Virginia had construction jobs above 6 percent of statewide jobs in some years over the last 20 years and continued above 5 percent even through the recession. Maryland has done quite well also with construction jobs above 5 percent through the last twenty years.

Both governors made promises on jobs that will be difficult to keep. We wish them well and want to remind them they are not alone. There are 27 states showing lower employment in 2009 compared to 2000 but Maryland and Virginia are not among them. If the two governors concentrate on health care, education, and professional services, then new jobs could generate enough new spending to boast employment in the supporting service sectors. They are getting off to a slow start, but we can check their progress at a later date.

Free Trade, NAFTA and the Saga of North Carolina

Those on the side of free trade support their case with logical reasoning. Roughly speaking they argue free trade benefits everyone because American industry has rising productivity where increasing efficiency saves many hours of labor, which can be released to other uses. When economists see growth in output in manufacturing with falling employment they say "Wow, this is terrific because the economy is producing more goods with less hours of work and now other people can be released for jobs producing more goods and services and growth in other industries.” Economists see these changes as a natural flow of reallocation and a movement toward efficiency.

When the debate was ragging over NAFTA, free traders discussed prospective investments. They said America has employment in apparel manufacturing, which is a labor intensive and low productivity industry. By comparison Mexico has had close to a quarter of its labor force working in inefficient low productivity agriculture. They predicted unemployed Mexicans would be able to shift to apparel manufacturing or other manufacturing, while Americans leaving apparel jobs would work in other expanding industries in the United States. There were confident and made predictions for more jobs on both sides of the border. Free traders admitted less restrictive trading between the United States and Mexico could be a difficult transition, but they have faith free trade would mean growth and jobs for all.

Over at the Bureau of Labor Statistics the hard working folks produce labor data within the North American Industry Classification System, a.k.a. NAICS. 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, transportation 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 compare faith with reality.

Data reported within the North American Industry Classification System includes three Textile industry categories: Textile Mills, Textile Product Mills, and Apparel Manufacturing. These three categories have 23 industry groups and industries. In 1990, there were 1.63 million US jobs in those 3 categories. By 2006 the total was down to 594 thousand, a loss of 1 million and 40 thousand jobs. Every single one of the 23 industries mentioned above lost jobs. Fiber, yarn and thread mills lost 54 thousand jobs. Carpet and rug mills along with mills making curtains, linens, bedspreads, sheets, towels, canvas and canvas bags, all down. Knitting mills making hosiery, socks, underwear and nightwear along with mills in cut and sew apparel for men, boys, women, girls and infants, all down. Apparel went from 932 thousand jobs in 1990 to 238 thousand jobs left in 2006. That does sound like a difficult transition.

The Jobs of North Carolina

The jobs above are for the whole country, but North Carolina has been a major employer in textiles and apparel. In 1990 North Carolina had the highest percentage of manufacturing employment for any state, 26.4 percent. That was 824 thousand manufacturing jobs out of total establishment employment of 3.1 million. Michigan and Ohio, both well known manufacturing states, had lower percentages, 21.1 percent and 21.8 percent respectively. The 1990 North Carolina manufacturing base had a broad range of industries with thousands of jobs in wood products manufacturing including furniture, but also fabricated metal products, machinery, electronics, electrical equipment and transportation equipment. Even more jobs were in non-durable goods like food processing and chemical and pharmaceutical manufacturing in addition to textiles and apparel.

By 2006, manufacturing jobs dropped to 553 thousand, a loss of 271 thousand jobs. Total employment for Textile Mills, Textile Product Mills, and Apparel Mills in North Carolina was down from 286 thousand to 81 thousand, a loss of 205 thousand jobs. That is why I am thinking if we want to know more about free trade and jobs we should look at the saga of North Carolina.

By 2006 North Carolina’s manufacturing employment dropped from 26.4 percent to 13.8 percent of statewide establishment employment, the biggest percentage drop in manufacturing employment for any state. Despite the manufacturing job losses North Carolina establishment employment went up by 898 thousand jobs in the 1990-2006 period. The increase occurred during the same period that manufacturing employment went down 271 thousand jobs with another 14 thousand jobs lost in utilities and agriculture. In that way new jobs have to replace lost manufacturing, utility and agriculture jobs before there can be more jobs. So even though there are 898 million more establishment jobs now than in 1990 there are 1.18 million more service jobs in North Carolina.

Since free trade advocates admitted there would be manufacturing job losses states like North Carolina would not be happy to hear about, they predicted there would be new investment and expansion into sectors with higher productivity. In effect they said textile and apparel jobs were expendable because they were low paid anyway and new jobs would open up to replace the old ones. If we just count the jobs they look right in their predictions, but counting jobs implies that one job is the same as another. In the saga of North Carolina the new 1.18 million jobs look very different from the old ones. Remember that number, 1.18 million.

North Carolina’s Big Four in New Jobs

Start with government because the biggest expansion of jobs in North Carolina from 1990 to 2006 came in government, but not the federal government. State and Local government created 179 thousand new jobs, half of them in education. If we add the new jobs at private schools and colleges the total comes to 222 thousand new jobs. Since 1990, North Carolina state and local employment and all categories of public and private education have been growing faster than the statewide average. Both government and education make up a growing percentage of North Carolina jobs, which is important given NAFTA and the loss of manufacturing jobs.

Despite all the nasty and derogatory things said about government, governments create transactions and employment. Take the auto safety inspection. In North Carolina it is $18.20 for a yearly inspection. On the Bureau of Transportation website, they report just over 6 million vehicle registrations for North Carolina. At two inspections per hour that creates more than 1500 statewide jobs, assuming an 8-hour workday five days a week. It’s just a yearly inspection. How about twice a year? How about four times a year? There was a time when people did their own car inspections. Checking your lights, your wipers, your tires, are among life's easier do it yourself jobs. No more in North Carolina. The legislature created transactions and some jobs.
Government employment is already large. Actually 22 million work as employees on government payrolls nationwide. There are 2.7 million in the federal government, 5.1 million in state government, nearly 14.2 million in local government including education and government hospitals. In North Carolina 675 thousand work in government, 16.8 percent of statewide employment. Still it undercounts employment that is the result of government action such as service station employees who do auto inspections since they are on private payrolls even though they are doing the government's work. The terms government contractor, outsourcing and privatization all connote private businesses, but they are private businesses doing government funded or government sponsored work.

In education, we hear complaints in the popular media about failing schools and the need for more accountability. Complaints help bring pressure for smaller classes, all day kindergarten, special education, counselors, and testing. Better education coincidentally means more jobs.

Government and education took first place for job gains, but then comes health care with 218 thousand new jobs for North Carolina. The new health care jobs are in physician’s services, hospital care and nursing and residential care facilities. The total includes 41 thousand social service jobs. Many of these jobs are counselor and social work jobs, which can be attached to the health care industry, although they are also in government and sometimes private firms.

When people think about health care they typically think about doctors and nurses. At the BLS though, doctors and nurses are part of a category of 52 health practitioner occupations, which also include pharmacists, therapists, and a variety of health technologists and technicians. Another occupational category called healthcare support has 15 additional jobs and all of them have aide, assistant or attendant in their job title. Health care practitioners and health care support occupations are two of what are really three segments of employment in health care. A third segment might be called administration or overhead and there is lots of it.

If the American health care system had a history like public education it might not be as bloated with administration as it has come to be. With education people live somewhere and that somewhere is in a school district. Families with school age children send their children to the school in their district.
Americans could have universal health care. Instead we have a decentralized health care system with three large groups making transactions. On the medical side we have health care venders: hospitals, laboratories, clinics, HMO’s, PPO’s, independent practice offices, groups and associations. They do business among themselves but also with private insurance companies and patients. Medical venders send out bills and private insurance companies maintain bureaucracies to take them in.

Then we have government where the federal, state and local governments all maintain health care bureaucracies to administer Medicare, Medicaid, Social Security Disability, workmen’s compensation and the Veterans Administration. Separate programs with separate bureaucracies create lots and lots of administrative jobs. Medicaid is a federal program for the unwanted poor with federal guidelines but it is administered through 50 state bureaucracies. Medicare is administered state by state with separate administrative contractors processing claims. Medicare does not cover an entire bill so private insurance companies sell Medigap policies to millions so one hospital visit or one physicians service visit can generate two bills and brings action at many bureaucracies.

Workmen’s compensation, which is really health care for people injured on the job, operates under federal guidelines through 50 state bureaucracies, but the states allow private companies to write the insurance so it supports jobs in private companies and insurance agencies. Military veterans have a separate health bureaucracy. Disability coverage supports additional bureaucracy through the social security administration and several specialty programs.

In the national economy the health care industry supports 2.5 million office jobs as bill and account collectors, billing and posting clerks, file clerks and general office clerks. In North Carolina, it looks like 60 to 64 thousand of the 218 thousand new health care jobs will be in office work. BLS reports a decline of 15 thousand jobs for North Carolina Sewing Machine Operators, assuring some new faces to fill those office jobs.
Universal coverage would consolidate health care administration and reduce the need for the multitude of bureaucracies and the multitude of paper forms. With universal health care it is easy to imagine standard procedures and the use of unified computer billing to eliminate paper. That would be efficient. America could get rid of those costly and inefficient office jobs filing and shuffling bills, but we have to be careful about efficiency when America needs jobs. In North Carolina, they lost 271 thousand manufacturing jobs and economists and free traders think of that as an opportunity for new investment and new jobs in more efficient and productive pursuits. In North Carolina though, people know an inefficient office job is better than no job at all.

The next biggest category of North Carolina employment growth generated 125 thousand new jobs in a sector called Administrative and Support Services. 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 from productivity increases, NAFTA and the global economy, administrative support services looks like the ideal sector for unemployed Sewing Machine Operators from North Carolina’s apparel industry. They can start a small business. Free traders sometimes speak in grandiose terms of investments in new innovations and technologies, but the administrative support services do not need much investment. A computer, a telephone, 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.
Sometimes administrative support services do not specify outsourcing of any particular service, but people are leased as hours of work by a temporary help agency. The NAICS manual explains that temporary help establishments do not provide supervision of their employees at the clients work site. The manual explains that Professional Employer Organizations “typically acquire and lease back some or all of the employees of their clients and serve as the employer of the leased employees for payroll, benefits, and related purposes.” The arrangement makes it possible for a client to fine tune employment to the ebb and tide of business. Actually 77 thousand of North Carolina’s 125 thousand new jobs in this sector fall in this category.

Making a living in administrative support services sounds hard, but the next biggest category of new jobs may not be any easier. It is restaurants. From 1990 to 2006 North Carolina restaurant employment nearly doubled with a 111 thousand new jobs. In the Standard Occupational Classification they use for government data these jobs are called food services occupations. There are various categories of cooks, hosts, hostesses, bartenders as well as your waiter or waitress.

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 let’s 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 6.6 million jobs.

There are 9.1 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 11.7 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 and North Carolina need jobs, so now you know, you must go to restaurants. It’s your civic duty. Go out often. Be kind; leave a cash tip for your waiter or waitress.

Bringing in the Exports

Remember we are looking 1.18 million new jobs in North Carolina now that we have a global economy, NAFTA and free trade. We have 676 thousand new jobs so far but we need 506 thousand more jobs. North Carolina still has a manufacturing base, but smaller by a third at least in terms of employment. Notice that many of the new jobs mentioned above are local jobs. Very likely government, education, health care, administrative support, and restaurants have North Carolina buyers and sellers. States losing their manufacturing base may need to pull inward to replace their lost manufacturing transactions. Losing manufacturing pressures North Carolina’s economic agents, be they individuals, families, business or government, to transact with each other to generate local jobs. If state and local governments will spend all their money as fast as they can and be ready to borrow and raise taxes, they can keep pumping money in the local economy and support essential job creation.

Even so a state like North Carolina must pull in some transactions from outside its borders. To buy things from out of state, things like gasoline for example, North Carolinians will have to sell something out of state, or bring in others who spend their money. States losing their manufacturing base need to bring in some exports.

The federal government helps immeasurably in the need to bring in outside money. North Carolina has only 4 thousand more federal jobs since 1990 so it is not helping much with actual jobs. Federal government jobs continue to decline modestly in most of the states. However, the Federal government brings in outside money when it pays social security to a state’s retired residents. It is not only that the state’s current retirees bring in social security money, new retirees moving to North Carolina from other states and metropolitan areas bring any pensions they might have and a capital gain from selling their over priced suburban home.
Maybe North Carolina’s new retirees like to go to restaurants and helped to create some of the above mentioned restaurant jobs. Maybe they built or remodeled a new retirement home, which helped to create some of North Carolina’s 77 thousand new construction jobs, which include 62 thousand new jobs in establishments that do the specialty trade contracting that is common in residential construction. In North Carolina they are smart enough to love the elderly, they don’t take jobs, they create jobs.

Tourism can help replace lost manufacturing too. States like North Carolina have ocean beaches and other tourist advantages. Many states promote themselves as tourist sites and if they can do it successfully they bring in outside money, which has the same effect as selling manufactured products to other states. Other states less endowed with natural beauty turn more quickly to gambling. North Carolina has apparently avoided gambling since I do not find gambling jobs in state job files, but worse job totals show only 5 thousand new jobs in traveler accommodations, RV parks and recreation camps, bed and breakfast inns and rooming and boarding houses from 1990 to 2006.

Driving through, or into, North Carolina also has a similar effect to selling manufactured goods outside the state. There were 26 thousand new jobs in transportation, which probably involve some interstate travel and bring in out of state money. Here though airline transportation jobs declined and most of the increase is from 6 thousand new trucking jobs and 10 thousand new storage and warehouse jobs.

Finance and insurance services tend to be local services, but North Carolina is home to two Charlotte based national banks: Wachovia and Bank of America. If major banks like Wachovia and Bank of America lend out of state for credit cards and other loans that suggests some of the new jobs came from selling services outside North Carolina. North Carolina has 74 thousand new jobs from management offices and finance for the 1990 to 2006 period.

Scraping out some more local jobs

In the tally of new and replacement jobs we are up to 862 thousand out of a total of 1.18 million. We have 320 thousand more jobs to catalog in the new mix of jobs now that North Carolina is losing its manufacturing base. In North Carolina the remaining tally of new and replacement jobs look primarily like local service jobs. The next biggest category of job gains in North Carolina comes in retail and wholesale trade with 108 thousand new jobs. Both wholesale and retail trade have growing employment but at growth rates below the rates for statewide and national 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.

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 statewide retail employment. In 1990 retail jobs had 12 percent of national employment with a slow steady drop to 11.2 percent by 2006. In North Carolina it was 12.1 percent in 1990; now it is 11.2 percent. The percentage trends show the same pattern in the other 49 states and the national economy.

Because retail jobs remain around 11 to 12 percent of national and statewide employment the only way to have more retailing jobs is to have a bigger population to serve. For anyone in local government or a 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. North Carolina retail jobs show the same trends as other states. Retail jobs do not grow fast enough to create their share of new jobs; other service areas have to increase faster to take up the slack.

Electronic shopping has the potential to break the link between retail jobs and the population it serves. In the national economy Internet jobs are growing but still only 241 thousand jobs out of over 15 million trade jobs. 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 no 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.

Other new jobs in North Carolina not mentioned so far continue to be in service categories, primarily local services. Professional service firms added another 82 thousand jobs and 69 thousand jobs in repair and maintenance services, personal services and some non-profit organizations.

Professional service firms have professional jobs in careers like lawyer, architect, engineer, and computer jobs. Management consulting firms, advertising firms and veterinary services are also here with a few other professional jobs among the new jobs in these sub sectors.

Lawyers help pump money into the local economy because North Carolina lawyers belong to the North Carolina bar in order to represent clients in North Carolina courts, or advise them on North Carolina law. America’s legal system with 50 state court systems helps sprinkle lawyers around the country and makes lawyer transactions local transactions.

More North Carolina engineers work in engineering firms now than 1990 but the increase offsets the decline of engineering jobs at manufacturing firms. Manufacturing firms employ many engineers, but layoffs come for them as well as production workers when manufacturing declines or plants close or move elsewhere as they did in North Carolina. Moving from a job at a manufacturing firm to an engineering firm dumps engineers into outsourcing contract arrangements so the gains in the professional sub sector cannot be viewed with too much excitement in North Carolina, although we can hope their new clients will include some of their former North Carolina employers. That would keep their transactions in the local economy.
Other service sub sectors have repair and maintenance services, personal services and some non-profit organizations. These sectors added another 69 thousand jobs by 2006. Repair and maintenance means jobs fixing cars and trucks, although there are some household appliance repair jobs and some work for business machine repair. Personal services are haircuts and beauty salons, funeral homes, dry cleaning, pet care, parking lots, photo finishing and a few others. Non-profit organizations include churches, which can be expected to keep their spending in the local economy. Other non-profits groups include civic groups like the optimists club, but also business groups like the Chamber of Commerce, and labor union locals.

North Carolina did share in some of the growth in information services jobs in publishing, communications and with more jobs at Internet Service Providers, Web Search Portals, and data processing. There are 21 thousand more jobs in these sectors than 1990, but all of them show a decline in employment since the 2000. The last six or seven years show declines for North Carolina, but also in national employment.
There was an increase of 19 thousand jobs in real estate and another 20 thousand jobs in entertainment and recreation. We can expect that North Carolina realty firms sell North Carolina real estate. Entertainment and recreation includes historical sites and some tourist attractions like golf courses, but recreation has lots of local service jobs at private country clubs, health clubs and fitness and recreation centers. Gambling jobs would be included here but BLS reports no jobs in North Carolina as gaming dealers or gaming supervisors so we have to feel admiration for those ethical minded North Carolinians who want to work and survive without gambling.

There we have it: North Carolina’s new jobs with NAFTA, free trade and the global economy. Government and education take the lead, with health care next followed by a smorgasbord of local services, some tourism and finance, but not manufacturing, not mining and not agriculture.

Job growth in North Carolina during a period of NAFTA free trade policies supplies politicians and the media with enough good news to let them talk like job growth is their achievement and the result of free trade and NAFTA. The evidence shows that North Carolina found jobs for itself by pulling inward and buying and selling more services from each other.

With free trade the few people left working in North Carolina’s cut and sew apparel manufacturing compete with every other cut and sew operation worldwide. They compete with low paid Chinese or Mexican cut and sew workers because politicians and free traders have a doctrine that says it is good. The evidence shows that people got jobs in local services like restaurants where it does not matter how many cooks or waiters there are in China, or Mexico or anywhere else.

North Carolina still has a base of 553 thousand manufacturing jobs, despite 16 years of decline. Now that we know how North Carolina tied itself in knots replacing the 271 thousand jobs already lost in manufacturing, it would be a good to have manufacturing employment stabilize and stop its decline. The evidence shows that North Carolina lost 12 thousand manufacturing jobs in 2006 and lost 10 to 50 thousand jobs every year since 1995 with no sign of a high tech revolution to replace hemorrhaging textile jobs.

Several hundred years ago economist David Ricardo wrote a fine analysis of the advantages of free trade and a global economy, describing a process of specialization and division of labor that raises productivity and generates growth. We can think he might be pleased to learn today’s free traders rely on his analysis to support free trade policy. Mr. Ricardo lived in a pre-digital age before electricity, computers, robots and gigabytes of data; an age before global access to technology. We can wonder what he would think if he found so many of America’s and North Carolina’s jobs in restaurants, gambling casinos, pet care salons, fitness centers and office rigmarole. Would he deny free trade creates government taxing, borrowing and spending to keep people employed? Would he deny free trade in North Carolina creates service jobs in restaurants? Would he predict more jobs in “hi-tech” industries after 17 years of manufacturing jobs losses and 17 years of service industry gains? Would he say if free trade means more decline in manufacturing that is good for North Carolina because free trade is always the best policy? Maybe if Mr. Ricardo met the data he would take up managed trade?