With some 217,000 jobs added by employers in May, the US economy finally has grown enough jobs to replace all those lost during the recession – and to reach a new all-time high.
It’s a milestone that raises a question: How is the structure of today’s job market different from the job market of January 2008, when the prior peak was reached?
Some sectors of the economy – notably health care and education – have led the jobs recovery and now account for a significantly larger share of all US jobs than they did six years ago. The cluster that the Labor Department calls “professional and business services” – everything from engineers to janitors – has also done well, as has the “leisure and hospitality” sector that spans occupations from museum workers to line cooks.
In short, it’s the growth in service jobs like those that have pushed employment above its prior peak. This has occurred even though not all portions of the services arena are growing. America has about 250,000 fewer retail workers than six years ago. And more than 350,000 financial jobs have gone the way of the “interest only” mortgage.
The rise of the service sector is a longstanding trend, but one that the recession accelerated. The steep downturn took a massive toll in the goods-producing side of the economy. Factory and construction jobs still are way below their levels of early 2008.
The deep recession also took a toll on government as tax revenues fell. The public sector has 500,000 fewer jobs than in early 2008, with about four-fifths of that loss coming at the local level rather than state or federal.
The broad message from all this: Although the shifts aren’t rapid or dramatic in all cases, the structure of the US economy is far from static. With unemployment still higher than normal – 6.3 percent of the work force according to Friday’s Labor Department report – it behooves workers young and old to pay attention to shifting opportunities.
Some details from an analysis of where the job market stands now versus early 2008:
The overall jobs recovery has been slow. By now that’s no surprise. But the fact that it took more than six years to regain the prior jobs peak is unprecedented in the US since the Great Depression. Americans are still waiting for a real pickup in economic growth. An index of economic optimism, tracked monthly in a Christian Science Monitor/TIPP poll, still stands at a pessimistic level now – a bit below the neutral level of 50 and not much higher than in early 2008.
Some industries are gaining jobs fast. In the “goods” side of the economy, a boom in domestic energy production has helped to drive a 21 percent job gain in the mining and logging sector since 2008. Education and health-care jobs are up 13 percent, with gains that have persisted even during the stretch from 2008 to early 2010, when the rest of the economy was in a jobs freefall.
The service sector now accounts for 70 percent of jobs. Private sector service industries represent 70.5 percent the 138 million jobs tracked in the Labor Department’s latest survey of payroll employers. That’s up from 68 percent in 2008. The service gain comes at the expense of the goods-producing sectors, and to a lesser extent government.
Manufacturing and construction are growing now, but … These hard-hit sectors have been growing again since the nation’s job total reached its recession-era low point in February 2010. But factory jobs are still down about 12 percent from 2008 levels, and construction employment is 20 percent lower now than it was then.
The postal service is shrinking, even if the price of stamps is not. The US Postal Service has 589,000 employees, but that’s down 22 percent from six years ago. That’s more shrinkage than has been seen in the public sector more broadly. Local governments in the US employ 2.8 percent fewer people than in 2008, state governments 1.7 percent fewer, and the federal government 1.2 percent fewer.
Low-wage occupations are among the big job gainers. Food services, essentially at the bottom of the nation’s wage ladder, have added more than 950,000 workers now since 2008. Telemarketing and temp jobs have also grown significantly. Some high-wage jobs such as in scientific research have also grown, but a recent analysis by the National Employment Law Project concluded that the mix of new jobs tilts toward lower pay. “Today, there are 1.85 million more jobs in lower-wage industries than there were prior to the recession,” the group said in April. “In mid-and higher-wage industries, however, there are nearly two million fewer jobs.”