Life and Death in the Labor Market

The Wall Street Journal recently listed the Top 10 Dying Industries, via research firm IBISWorld. Some industries didn?t just see temporary decline during the recession ? some won?t recover and will slowly (or quickly) disappear. IBISWorld?s data format is a little different than ours, and its categories are somewhat obscure, but we thought it would be interesting to pull together a similar table with the associated job data.

With one major exception, all of these industries have seen some shakeup. But job loss by itself doesn?t tell the full story. Wired telecommunications carriers lost the most jobs, but are tied with newspaper publishing for the second smallest percentage change on the list. This is probably because these are entrenched industries and will take longer to become totally obsolete. Contrast those industries with photofinishing. Photofinishing has been a smaller industry all along, but its percent loss is at 68%. Consider the last time you looked at snapshots that weren?t digital, and then say a little prayer for the photofinishing industry.

Description	2001 Jobs	2010 Jobs	Change	% Change
Wired Telecom. Carriers	1,038,230	709,179	-329,051	-32%
Mills	487,344	208,526	-278,818	-57%
Apparel Manufacturing	273,650	127,175	-146,475	-54%
Newspaper Publishing	428,659	289,997	-138,662	-32%
DVD, Game & Video Rental	167,526	84,442	-83,084	-50%
Record Stores	84,884	30,416	-54,468	-64%
Photofinishing	66,170	20,901	-45,269	-68%
Manufactured Home Dealers	43,203	19,430	-23,773	-55%
Formal Wear & Costume Rental	19,889	12,217	-7,672	-39%
Video Postproduction Services	26,098	26,319	221	1%

The one industry on this list that is not like the others is video postproduction services. As we mentioned earlier, there?s not an exact relationship between our industry groups and IBISWorld?s, so where it has found overall decline we?ve found slight growth. Here?s a look at our overall fastest-declining industries since 2001:

Description	2001 Jobs	2010 Jobs	2001-2010 % Change	2001-2010 Change	2009-2010 Change
Crop and animal production	3,060,000	2,630,246	-14%	-429,754	-11,754
Professional Employer Organizations	798,710	432,936	-46%	-365,774	-6,154
Wired Telecommunications Carriers	1,038,230	709,179	-32%	-329,051	-31,331
New Single-Family Housing Construction (except Operative Builders)	849,104	526,926	-38%	-322,178	-57,059
Department Stores (except Discount Department Stores)	857,007	562,392	-34%	-294,615	2,786
Temporary Help Services	2,349,389	2,125,113	-10%	-224,276	284,107
New Car Dealers	1,118,633	902,006	-19%	-216,627	-3,062
Postal Service	866,747	698,630	-19%	-168,117	-8,185
Nonresidential electrical contractors	767,556	609,549	-21%	-158,007	-47,931
Scheduled Passenger Air Transportation	560,105	409,277	-27%	-150,828	-2,988

This table shows some pretty major decline in several industries. ?Crop and animal production? along with ?new single family housing construction? stand out. The interesting one on this list is ?temporary help services.? That industry shows overall decline of over 224,000 jobs, but this amazing comeback from 2009-2010 where it gains over 284,000 jobs. It ends up with the smallest percentage decline on the list, 10%. However, if we look from 2001-2009, it would top the list here, with a loss of over 508,000 jobs, or 22% decline.

The industry with the largest percentage loss over that period, ?professional employer organizations,? shows 46% decline. That industry, a provider of leased employees typically for human resources management, has shown steady decline since 2003. While that decline looks to have slowed recently, it hasn?t stopped. We?ll have to wait for more data to see what happens.

Is There Life in Manufacturing?

Before we get to the better news, let?s look at a quick reminder about what manufacturing has been doing over the past 10 years. From 2001 to 2010 the manufacturing sector lost 4.7 million jobs nationally. Pretty dismal. However, there are industries within the sector that show growth. If we look from 2001-2010 the top 10 fastest-growing manufacturing industries are.

Description	2001 Jobs	2009 Jobs	2010 Jobs	2001-2010	2009-2010
Wineries	27,531	47,117	46,850	19,319	-267
Perishable Prepared Food Manufacturing	24,584	36,785	36,962	12,378	177
Oil and Gas Field Machinery and Equipment Manufacturing	48,327	61,698	59,673	11,346	-2,025
Ship Building and Repairing	92,336	103,526	100,841	8,505	-2,685
Surgical and Medical Instrument Manufacturing	107,547	115,938	115,721	8,174	-217
Ethyl Alcohol Manufacturing	3,272	9,797	9,708	6,436	-89
Plastics Packaging Film and Sheet (including Laminated) Manufacturing	5,879	11,782	12,302	6,423	520
Digital Printing	20,894	27,531	27,308	6,414	-223
In-Vitro Diagnostic Substance Manufacturing	13,444	19,916	19,458	6,014	-458
Spice and Extract Manufacturing	16,126	20,708	20,980	4,854	272

This still isn?t the good news. As the table demonstrates, most of the industries showing high growth from 2001 to 2010 have slackened considerably from 2009 to 2010, and many of them have declined. We would hope to be seeing some hint of recovery in these industries, but instead we?re seeing loss.

To zero in on industries showing current growth in the manufacturing sector, we?ll look at the top 10 manufacturing industries showing the most growth from 2009 to 2010.

Description	2001 Jobs	2009 Jobs	2010 Jobs	2001-2010 Change	2009-2010 Change
All Other Plastics Product Mfg.	400,046	260,516	264,562	-135,484	4,046
All Other Motor Vehicle Parts Mfg.	167,487	106,257	109,069	-58,418	2,812
Automobile Mfg.	168,403	94,904	97,424	-70,979	2,520
Travel Trailer and Camper Mfg.	36,231	23,190	25,347	-10,884	2,157
Motor Home Mfg.	17,612	9,473	11,525	-6,087	2,052
Motor Vehicle Metal Stamping	111,209	55,426	57,470	-53,739	2,044
Wet Corn Milling	9,185	8,127	10,166	981	2,039
Motor Vehicle Seating and Interior Trim Mfg.	65,601	40,325	42,194	-23,407	1,869
Iron and Steel Mills	118,583	85,200	86,837	-31,746	1,637
Motor Vehicle Transmission and Power Train Parts Mfg.	96,132	53,644	55,109	-41,023	1,465

As you run over this list you?ll probably get the takeaway pretty quickly. The lesson of this table is that the federal auto manufacturing bailout had an immediate positive effect. In an already declining industry sector the bailout has enabled auto manufacturing to recover, very slightly, after a long period of decline.

Of the three industries on this list not directly related to auto manufacturing (all other plastics mfg., wet corn milling, and iron and steel mills) only wet corn milling showed growth from 2001 to 2009. This means that nine of the top 10 manufacturing industries that have grown from 2009 to 2010 are industries showing a sudden turnaround, without a growth trend in place. Because these correlations are so close, we took a quick look at the relationship between auto manufacturing and iron and steel milling in our input-output model and did not find a strong industry tie. The same was true for auto manufacturing and all other plastics mfg.

Life vs. Death

So where do we go from here? First we looked at dying industries. Then we looked at industries within a dying industry sector that are recovering because of massive infusions of money from the government. Is it all really that depressing out there?

The following table shows high growth industries looking into the future. We applied a filter to get industries growing beyond than the national average, percentage-wise, and then chose the top 10 projected to add the most new jobs from 2008 to 2014.

Description	2008 Jobs	2014 Jobs	Change	% Change
Local government	14,425,000	14,905,114	480,114	3%
Crude Petroleum and Natural Gas Extraction	556,883	987,818	430,935	77%
Home Health Care Services	1,294,652	1,697,041	402,389	31%
Offices of Physicians (except Mental Health Specialists)	2,439,113	2,834,694	395,581	16%
Investment Advice	855,566	1,220,851	365,285	43%
Portfolio Management	731,703	1,088,517	356,814	49%
General Medical and Surgical Hospitals	4,312,784	4,669,173	356,389	8%
Private Households	1,623,184	1,922,073	298,889	18%
Services for the Elderly and Persons with Disabilities	663,261	936,620	273,359	41%
Federal government, civilian, except postal service	2,069,474	2,327,756	258,282	12%

Local government tops the list, adding nearly a half million jobs. Its percentage growth is the lowest on the list, however. On the other hand, crude petroleum and natural gas extraction is projected to grow by around 430,000 jobs from 2008 to 2014 and projects 77% growth. Health industries make an excellent showing. Between home health care services, offices of physicians, general medical and surgical hospitals, and services for the elderly and person with disabilities, there?s a total projected addition of 1,427,718 jobs. Also notable: two finance industries show up here, investment advice and portfolio management, both of them indicating that after the crash folks are interested in getting some outside advice on their holdings.�

Much of this growth appears to be driven by demographics: the huge baby boomer generation is reaching senior status, and the U.S. is projected to continue its overall population growth fueling the need for growth in local government and health care to serve growing demand.

Of course, this isn?t a comprehensive look at industry growth. Everyone knows that the health sector is growing, and we?re starting to spot other reasons for hope. But the truth is that the US economy recently underwent a major shakeup, and hasn?t totally bounced back yet. As far as manufacturing goes, there?s not a ton of good news right now. There is some life out there. But we?ve still got a long way to go.

Rob Sentz is the marketing director at EMSI, an Idaho-based economics firm that provides data and analysis to workforce boards, economic development agencies, higher education institutions and the private sector. He is the author of a series of green jobs white papers.

Illustration by Mark Beauchamp