Services: Business Demand Rivals Consumer Demand in Driving Job Growth; the Services Division, a Part of the Service-Producing Sector, Contributed More Than Half of U.S. Job Growth between 1988 and 2000; Rising Demand from Enterprises Was Key. (Job Growth in Services).(Statistical Data Included)

By Goodman, Bill; Steadman, Reid | Monthly Labor Review, April 2002 | Go to article overview

Services: Business Demand Rivals Consumer Demand in Driving Job Growth; the Services Division, a Part of the Service-Producing Sector, Contributed More Than Half of U.S. Job Growth between 1988 and 2000; Rising Demand from Enterprises Was Key. (Job Growth in Services).(Statistical Data Included)


Goodman, Bill, Steadman, Reid, Monthly Labor Review


More than 97 percent of the jobs added to U.S. payrolls in approximately the last 12 years were provided by the service-producing sector. That sector is divided into six major divisions of industries, including: transportation, communications, and public utilities; wholesale trade; retail trade; finance, insurance, and real estate; services; and government. (See chart 1.) Just one of the six divisions, services--which includes such diverse industries as healthcare, entertainment, temp agencies, and business consulting--gained considerably more than half the jobs added to the U.S. economy and became the largest division by far. As late as 1984, the numbers of jobs in the manufacturing, retail trade, government, and services divisions were reasonably comparable. By 1999, services had about twice the employment of manufacturing or government and about one and three-quarters times the number of jobs in retail trade. (1)

[ILLUSTRATION OMITTED]

This article is concerned with the question of why the services division gained so many jobs. The long-term upward trend of services jobs and its causes are the major subjects of this article; cyclical effects are not addressed. One way of approaching the present subject is to trace the demand for the services provided by the division. "Input-output" analysis is concerned fundamentally with producers' requirements for goods and services in order to produce other goods and services. Input-output analysis is used in this article to quantify purchases of the relevant services by the various industries of our economy and by the sources of final demand, such as government, international trade, and personal consumption. (2) This article first describes job growth as distributed among the various industries of the services division. To explain job growth, the sales of the various services are broken down by type of purchaser. In each major group of industries within the services division, the greatest source of demand turns out to be either personal consumption or producers' needs. Various economic, demographic, political, and social changes that increase demand for certain services are described; so are certain restraints on the growth of particular services.

The major services industries are each characterized as primarily consumer-oriented, primarily business-oriented, or mixed, in accordance with the quantities of demand from business and consumer. Job trends in the three totals of business-oriented industries, consumer-oriented industries, and mixed industries are then analyzed in the context of certain social, economic, and political trends.

The services division

The main groups of industries in the services division are: (3)

* certain agricultural services (including, most important landscaping and horticulture)

* hotels and other lodging places

* personal services (such as dry cleaning, hairstyling, and tax preparation)

* business services (such as temp agencies and computer software)

* automotive services

* miscellaneous repairs

* motion pictures

* amusements and recreation

* healthcare

* legal services

* private education

* social services

* museums, botanical gardens, and zoos

* membership organizations (such as associations or churches)

* engineering and management services (including consulting)

* miscellaneous services

A clear-cut conceptual definition of the services division is problematic, as the services included are diverse in nature. Actually, the division is a miscellaneous category consisting of those parts of the services sector not claimed by other divisions such as retail trade or government. In fact, the services division is sometimes labeled as "other services." The economic activities of the division may be primarily physical (for example, repairs): intellectual (example: education): aesthetic (examples: art museums and performance); or otherwise of experiential value (for example, recreation). …

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Services: Business Demand Rivals Consumer Demand in Driving Job Growth; the Services Division, a Part of the Service-Producing Sector, Contributed More Than Half of U.S. Job Growth between 1988 and 2000; Rising Demand from Enterprises Was Key. (Job Growth in Services).(Statistical Data Included)
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