All Terrain Thinking

A Compendium of things I think are Important

Economics: It's not just whats' in your wallet

Employment

Now that we know how many people are looking for work, how well does the labor market do in terms of providing jobs for these people?  What types of jobs are there - what are the occupations growing most rapidly and in what industries are they?   What are the chances that someone willing to work will not be able to find work?   If you are interested in these questions then you will want to become familiar with the Bureau of Labor Statistics (BLS) and the BLS web site. This agency of the Labor Department collects and disseminates a wide variety of data on the performance of the labor market in this country as well as other industrialized and industrializing countries.  The primary sources of the data are based on separate samples of households and  businesses.  The BLS conducts monthly household surveys that provide estimates of employment, unemployment, and earnings. The Current Population Survey (CPS) is a program of personal interviews based on a sample of 60,000 households selected as being representative of the population at least 16 years old.  Households are chosen so that in any two consecutive months seventy-five percent of the households are the same.

Depending on their answers to a set of questions, the individuals surveyed are placed into one of the categories outlined in the diagram below. You are either employed, unemployed, or not in the labor force. You are considered employed if you are working for pay, either full or part-time work, any time during the week which includes the 12th day of the month.  You would also be counted as employed if you are self-employed, work without pay for at least 15 hours, or are out of work at the time of the survey because of sickness, vacation, or work stoppages. The household survey provides a wide array of information on the characteristics of the worker, (ex. age, race, gender, part-time status..), but it does not account for those individuals working more than one job.

In addition to the household survey, the BLS also collects employment, hours, and earnings data from payroll records voluntarily supplied by more than 350,000 establishments. These records allow for a breakdown of employment by industry and occupation, something impossible with the household survey.  Excluded from the establishment estimates of employment are any measures of the self-employed, but they do include double counting for those who work more than one job. When the two are compared, the household survey generally will be found to provide higher estimates of employment. 

So let's start with the good news - the news about jobs.  If you want to know about the outlook for specific occupations, the BLS has its Occupational Outlook on-line.  Here you can check out the 'spec' on some occupations which you may be considering.  If we look at overall growth we find that employment has expanded substantially faster than the population - in part a reflection of the growing labor force participation rates.  In a period where the population expanded approximately 80 percent, employment expanded nearly 170 percent. 

The engine behind the growth has clearly been in the service and government sectors, although the rise in government employment has slowed.  Since 1950, service sector and government employment have both risen more than 200 percent,  while manufacturing is only 20 percent higher and mining has actually fallen by a third. What you see here is the picture of employment in a post-industrial society. 

The employment performance of the US economy is even more impressive when we compare it to that of other high income, industrialized countries.  Employment in the US nearly doubled between 1960 and 1998.  This was twice the expansion in Japanese employment, and far far more rapid than the growth in Europe which ranged from 20 percent in France to 8 percent in Germany. 

Employment has grown substantially in the US in the post WW II era while undergoing a rather dramatic structural transformation into a post-industrial economy.  Now let's turn our attention to the measures of the labor market's ability to provide rising wages to its workers and provide employment for all those looking for work. 

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