Where the Jobs Went: May 2007 vs Year Ago

Our economy created 1.6 million new jobs in the past twelve months.  Some categories have fewer jobs today than last year at this time (manufacturing and construction), but those jobs were more than replaced by higher-paying jobs in certain other categories.  The table and chart below summarize the latest numbers from the Bureau of Labor Statistics.

Next, here's the chart of gains and losses; click to enlarge it so you can see the category names:

I think I'll keep posting this monthly, now that we are entering a presidential campaign containing a plethora of politicians fond of trying to scare us into thinking we're exporting high-paying jobs.  Reason: The official numbers tell us a much different, more encouraging story.  The mix is shifting, that's true, but we created more jobs (in higher-paying categories) than the jobs that went away.  On the bar chart, I added the average wage rate information to selected categories just to illustrate that point. 

Summary: With the right skills, one has promising, high-paying job opportunities in this economy.  Joseph Schumpeter told us that's how the creative destruction process works in theory, and that's how the current economy has been working in practice—political rhetoric notwithstanding.

Comments

[Bob]

Construction is cyclical so that's not surprising and not a big deal either. Manufacturing, durable or non durable, are loosing workers to automation. Can't stop that and we shouldn't want to.

Still don't like using averages, though.

[vorpal]

So, what was the net average wage of a job added in the past year? Is it greater or lesser than the average wage of all jobs one year ago? (inflation adjusted)

Your comments beneath the chart seem irrelevant.

[Ken]

vorpal,

Its right there at the bottom of the first chart "Private Non-farm Total".

The average wage is up 3.9%, from $16.74 to $17.40. I don't know if that's inflation adjusted but it still looks like it would be an increase after inflation.

[mark]

Steve, are the averages straight averages or weighted for the number of jobs at each pay scale? In other words, almost 1.2 million of the new jobs were at a lower pay than 2 of the 3 areas with job losses. Let's say you add a new job classification with 1 worker making $1000 per hour. The straight average would go way up, but the weighted average would probably not change considering there are 116 million jobs.

[Steve]

Bob:
I agree with you about averages; would be nice to know the standard deviation for each one.

mark:
They are weighted averages based not just on the category, but also on hours per week within each. I use the lowest level of detail they publish for wages, against the jobs detail. The data is from Table B3 and Table B1, respectively, at this page:
http://tinyurl.com/6z853

[muirgeo]

Isn't our population growth about 2.2 million per year? 1.6 million jobs doesn't quite seem enough.

[Steve]

muirgeo:
The unemployment statistic contains more relevant information as to the sufficiency of the number of jobs being created, as explained in Gene Epstein's book, "Econospinning." This post was about the total number of jobs, not the unemployment rate.

[muirgeo]

Steve,

First,I don'tunderstand,considering these numbers, how the employment rate went down.

Second, if this is a good economy I bet people must have really liked the Clinton employment numbers which created 2.4 million jobs per year on average.

[PseudoNoise]

IAW muirgeo, as I did in the last thread--my preference is to not use absolute numbers where the dynamics underneath change greatly over time.

For example, if our year-over-year growth in absolute jobs was zero, and overseas jobs grew by 2 mln, while our working-age population grew by 2 mln, I would think an honest analysis would say that 2 mln jobs went overseas (assuming they had 0 pop growth). But this analysis would say that no jobs were lost.

I don't think the analysis is wrong (kinda hard to be), I just don't think it's useful.

I guess a similar situation is when, for example, there was a complaint that Bush had "cut student grant programs". His answer was that he didn't cut them--they were getting more money than last year, but at a lesser rate than before (and as it happens, less than inflation). So Bush isn't wrong--he did give the program more money--but the effect is that there's less real money to go around so on the receiving end it's a cut.

BTW, I made a similar comment last time (that we need 150k jobs/yr to keep up with pop growth), and somebody asked where I got that number. I see it a bunch of places by word of mouth, but the last reference I have is 140k/yr from Economic Report of the President (table B-35) for 2004. I haven't been able to find a more recent stat (the 2007 report doesn't seem to have such info in it).

[JorgXMcKie]

muirgeo, how much of that population growth is illegal immigration, and how many of those are taking jobs off the books?

If you want to have a real discussion about your concerns, I suggest that you include *all* the data. That would include, I should think, new self-employed, too. Of course, if you did so it would expose your 'arguments' for what they are.

Surely by now we all *know* that the BLS doesn't catch all those who are working. Until you have good numbers on those 'gray market jobs' I don't think your caveats have any force.

(And just how does the BLS count those high-paying drug dealing jobs?)

[Stephen Reed]

Here is some slightly more detailed information about the jobs that have been created/lost and their median pay, however, it is only current as of May 2006.
he median job paid $30,400 annual salary in May 2006.

Between May 2005 and May 2006, about 2,297,140 net new jobs were created, an increase of about 1.76%. The U.S. population increased by about 1% during that time.

1,274,990 of those net new jobs created were in occupations with a median annual salary $32,070 or above.

1,022,130 of those net new jobs created were in occupations with a median annual salary equal to or below $28,080.

Data can be obtained in excel format from here:
http://www.bls.gov/oes/oes_dl.htm

Here is a good link to see the latest data in html. Shows comprehensive statistics for all the job types, how many of each, and the pay for each as of May 2006.
http://www.bls.gov/oes/current/oes_nat.htm

And, a look at the job creation during Bush's term.

From 2001 to 2006, 4,624,570 net jobs have been created.

2,376,380 of them have been in occupations with a current median annual salary of $32,070 or higher.

2,248,220 of them have been in occupations with a current median annual salary of $28,080 or lower.

For those who have been worried about the manufacturing occupations being destroyed, don't! They only pay a median of $27,360 annually. We've replaced 1,001,700 of these below overall median pay ($30,400 once again was the overall median as of May 2006) manufacturing jobs between 2001 and 2006 and replaced them with better paying jobs.

Here is a listing of those occupations that added more jobs between 2001
and 2006 that have a median wage higher than those manufacturing jobs and
those occupations’ median wage.

Business and financial operations occupations added 1,149,460 jobs with a
median annual wage of $53,690.

Computer and mathematical occupations added 250,330 jobs with a median
annual wage of $66,130.

Life, physical, and social science occupations added 163,340 jobs with a
median annual wage of $53,010.

Community and social services occupations added 225,320 jobs with a median
annual wage of $35,790.

Legal occupations added 67,370 jobs with a median annual wage of $67,730.

Education, training, and library occupations added 547,960 jobs with a
median annual wage of $41,100.

Arts, design, entertainment, sports, and media occupations added 218,590
jobs with a median annual wage of $38,340.

Healthcare practitioners and technical occupations added 594,810 jobs with
a median annual wage of $51,980.

Protective service occupations added 66,850 jobs with a median annual wage
of $32,070.

Office and administrative support occupations added 278,600 jobs with a
median annual wage of $28,080.

Construction and extraction occupations added 441,280 jobs with a median annual wage of $35,450.

Installation, maintenance, and repair occupations added 29,350 jobs with a median annual wage of $36,720.

I was also somewhat surprised to learn that management occupations have
lost 1,319,460 jobs and have a median annual wage of $80,980.

Why is the media focusing on the lost manufacturing jobs with a median annual wage of $27,360 but we never hear anything about the lost management occupation jobs or about all the good paying jobs that are being created?

[Jason]

NYTimes has an interesting related feature about class. In particular, the "income mobility" tab:

http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_01.html?adxnnl=1&adxnnlx=1180846074-ru4/9Sua6gvr8tmqhV4dqg

[Tom Clarke]

Why no jobs category for agriculture?

Is it so small?

[Harvey Farr]

While you talk about the jobs created, there is not a word about the economic impact of jobs lost or our trade deficit with China. How much money from city and town tax bases have the loss of those factories cost? What is the true impact of the liquidation of our economy? Why is it you economist types are so tunnel visioned that you can not provide an unbiased economic analysis that considers the whole picture about what is in our national interest? While China's intervention in currency markets has maintained the value of the Yen at 40% of the true value (Senate Banking and Finance Committee Testimony not one of the financial sector lobbyists testifying bothered to refute it), this 60% subsidy on labor and products has sucked jobs from our economy and dumped product on our markets in defiance of international law and their GAT and WTO treaty obligations restricting intervention in currency markets. This, and the on-shoring of the off-shoring movement by incorporation of 12 million to 20 million illegal immigrants into our economy, has lead to stagnation of middle class and working class American wages when adjusted for inflation in housing, education, health care and energy. It has also lead to the wholesale liquidation of our economy.

The historic trade deficits and huge Chinese reserves of U.S. currency created by this situation have lead to a corrupt, communist Chinese government having leverage on our economy and buying our companies. I can only think of my grandfathers, fathers, and my own tax dollars spent winning the Cold War. Gee I sure am worried about Hugo Chavez. Silicon Valley is a memory with no compensation to the American taxpayer for the billions of R&D money spent by U.S. taxpayers to develop those technologies. Corporate take the money and run.

In addition, China is rapidly militarizing. They shot down a satellite 500 miles above the earth this year and launched a new prototype nuclear submarine that will be armed with warheads targeting our cities. They plan to launch two new nuclear submarines a year for the next ten years. Their spending on defense is kept secret but it is clear that they are pushing hard for increased military power. This has raised concerns in Japan to the extent that many of their leaders are considering revising their constitution to allow them to militarize as a counter weight to Chinese military ascendancy. Read Foreign Affairs and The Economist, for the information their ridiculous globalization cheerleading contains. What will be the cost of this arms race to the American citizen and taxpayer? What is the overall economic impact of this disastrous trade policy that liquidates our country for the profits of a narrow group of multi-national corporations?

Don't worry about those manufacturing jobs! You are either a bunch of myopic, tunnel visioned fools or simply greedy traitors. I suggest you leave this country and go live in the country whose economy you support so hardily. Communist China's, I'll send you a file in a cake when the American freedoms my ancestors fought so hard for so many generations to bestow upon you, and that you take for granted, are aired in that country.

[Steve]

Harvey:
Net jobs created includes the effect of manufacturing jobs lost. Overall, the jobs lost were more than made up with higher-paying jobs created. Granted, when those new jobs are in someone else's home town other than yours, it can be disconcerting.

But overall, an economy creating more jobs that pay better is a healthy economy -- one that can better afford to fund its national security obligations, which happens to be near the top of my own priority list. An economy that is stagnating (same old jobs in the same old places) is an economy with dim prospects, as illustrated by the now defunct Soviet Union.

[Harvey Farr]

Does your data on wages include the retirement, disability, health insurance benefits associated with those manufacturing jobs? As opposed to those offered by these new, higher paying jobs being created? Or is it straight dollar for dollar hourly wages? My area of the country is doing great economically. I live on the East Coast. It is when I go to rural Tennessee, Nebraska, Ohio, upstate New York or those second tier cities like Memphis, Buffalo, Toledo, etc. that I see that our country is being hollowed out from the inside.

I was browsing for something to read in our local grocery store while on the way to the beach with my family yesterday and noted that Popular Mechanics has an article on that little test the Chinese performed in January. I heard it come across as a one liner on NPR in January. "The Chinese government performed a test shooting down a satellite 500 miles above the earth with a missile launched from China today." Just that much, nothing more. It alarmed me. Same thing with the nuclear subs, just a one liner on NPR. It should alarm every American. Not even a part of our national discourse or economic debate about globalization? What I am saying is that the state of our economy should be viewed in a broader context than just jobs created or lost, or on an hourly wage basis. The impact of the trade policies driving those economic changes and societal implications should also be considered and discussed. You should read the Popular Mechanics article, think about Tibet, then think about Taiwan and take a look at other information on how our "trading partner" is using the economic wealth created by our globalization trade policies.

Your message is the economy is fine, jobs are fine, the tax structure is fair and great. Well that may be so when the data is framed as you have framed it. But if you truly are a patriotic American, think about why one American factory worker should loose a job to a government such as communist China? Especially when the suppression of the Yen does not provide a level playing field for the American worker to compete against? Business Week had an article recently about how overseas profits garnered by multi-national corporations were skewing the economic data making it appear that the American economy and workers were more efficient than they really were. The gains in efficiency we have been taking credit for when evaluating American competitiveness in global economy are not real. The data had previously suggested that gains in efficiency in certain sectors were keeping pace changes in costs due to off-shoring. Business Weeks conclusion, American workers are not fairing well in the global market because we are not making gains in efficiency at the rate that we previously thought. Our workers are not competitive. They ballyhooed it as some great economicrevelation and had quaotes from all kinds of experts about how important this "discovery" was.

Now you are obviously an intelligent man, does that strike you as somewhat disingenuous reporting when the Chinese are implementing the predatory trade practice of suppressing the value of the Yen. Isn’t this the same as the farm subsidies we raised hell with Europe over a decade a go? Every expert that testified before the Senate Banking and Finance Committee thought so. It is an across the board subsidy that disadvantages American products and workers. Even the financial sector lobbyists testifying before the committee did not refute it. They just pushed for the legislature to put pressure on the Chinese government to open up their financial markets to American companies. They also testified that since the Chinese have gotten away with it for over a decade with no U.S. reprisals, so other Asian countries such as Japan and Korea are following suit and intervening in their currency markets to deflate the value of their currencies. How does one have a meaningful discussion on competitiveness without factoring that into the equation? How can anyone write such an article and draw such conclusions without even mentioning that? Where is this analysis in our economic dialogue? The "science" of econmics these days seems more like one sided cheerleading than an objective evaluation of the data and implications.

I am a registered republican. I believe in free trade with “allies” on a “level playing field” where parties live up to their “treaty obligations.”

As far as societal impacts go. Those factory jobs were jobs at which people who work with their hands could make a decent living. Sorry, there will always be a significant segment of our population that is better suited to that type of work. Certainly a “healthy economy” should include “diversity” shouldn’t it? I work in nuclear power. We have 33 new plants in the licensing process. Something I waited for our nation to wake up to since the 1970’s when I was doing research on acid rain and reading about greenhouse gases in 79. Bottom line is, my friends and I who have watched the decline in the quality of people in the trades are wondering, ”Who is going to build them?” We have suffered such losses in that sector of our economy and the unions that provided the apprenticeship programs that trained our craftsmen are in such decline, that we think constructing those plants at the quality level required for nuclear systems and components will be a steep learning curve and extremely inefficient and costly. I have seen some incredibly talented craftsmen perform great work in my day saving many man-hours and much cost to projects. I have also seen untrained, unskilled craftsmen make messes that cost millions to projects. Shouldn’t such considerations be part of our economic debate?

This is my problem with the type of economic analysis you are presenting on your web page. In fact I must say that the globalization craze is so rampant I don’t see such considerations discussed anywhere. Pick up the March 2007 issue of “Foreign Affairs” and read the article on “The Global University” by the president of Johns Hopkins and ask yourself how many U.S. taxpayer dollars from how many generations of Americans invested in Johns Hopkins is that man willing to liquidate to another country. He advocates breaking up our Harvards, Tufts, MITs, the cream of our academic institutions and moving their administrations overseas where labor prices are cheaper. This mania has gone far past our manufacturing base.

I seriously wonder why the American taxpayer should invest in any institution or any R&D when it can be liquidated at a whim by such men. How many millions of R&D dollars on transistors and silicon chips computer programming, etc. did American taxpayers invest through NASA and Defense spending since WWII eneded? “The Jobs of the Future,” remember that phrase from Tip O’Neil in 1980? Don’t worry about steel, or textiles, we need to invest in the jobs of the future. Where are the electrical engineering, computer programming and computer and memory chip manufacturing jobs we were told to invest in a mere 20 years ago at now? If we were share holders rather than taxpayers, what would the value of those investments be? What has been the economic loss to the American taxpayer for the liquidation of those jobs and that manufacturing base? I heard a guy from “Nanosolar” advocating tax subsidies for R&D and manufacturing of solar panels on NPR's Science Friday a few weeks ago. He said it could be the new Silicon Valley, the rebirth as “Solar Valley.” Now if I were a venture capitalist investing in his company, I would expect a return on my investment when a corporate raider bought it, broke it up and liquidated the assets or outsourced portions of it to a low cost country. Right? I think that such R&D is in our national interest but that companies who outsource the resulting manufacturing should have to pay back the investment to the American treasury so the funds can be used to develop new technologies. Or they should have to sign an agreement to keep those jobs in America for 50 to 75 years in order to get the taxpayer subsidies. I see a lot of talk about protecting corporate investments through intellectual property rights enforcement overseas and ZERO on protecting American taxpayer investments. Perhaps it is time to protect our investments as well as the intellectual property rights of the corporations. Where is that loss of investment for the American taxpayer, those welders, farmers and factory workers that paid those taxes in your economic analysis?

Corporations have the same rights under our laws as citizens but none of the obligations. They have one ethical requirement according to Mr. Friedman. Right? That ethical foundation is why “corporation” is as you say a “dirty word” in our society these days. This entity, this thing, has no moral, ethical or patriotic code. They have too much power over our economy and governance and as one of the experts testifying before that Senate Banking and Finance committee said, “Their interests in increasing earned values on shares have diverged from our national interests.” Well yeah. That is why we have taken no action against China on the Yen. Perhaps it is time to change the corporation’s status in our legal system. Maybe it is time our institutions and corporations took the same pledge of allegiance and swore the same oaths as the citizens of our country do and the immigrants seeking citizenship do? Maybe they should be required to serve the national interest as our kids are in Afghanistan and Iraq? They have abused their status in our society.

I must admit that at least you are trying to present data based on facts. I wonder how it would look if you considered broader economic implications or parsed it in a different way. But it is good information. We should not be selling out the working mans economic future or the institutions and technologies that our American system of capitalism and democracy created and allowed to flourish just to enrich the upper echelon of our society and certainly not to enrich a communist regime that disdains us and is antithetical to our American heritage and ideals. The “economic” picture is bigger than the growth in GDP. The price our children and grandchildren are going to have to pay for these policies is going to be steep. Thank you for addressing my comments.

Sincerely,

Harvey Farr