Academic journal article ABA Banking Journal

Where Are the Jobs?

Academic journal article ABA Banking Journal

Where Are the Jobs?

Article excerpt

OVER THE LAST FIFTEEN YEARS (during both Democratic and Republican administrations) the growth in jobs has been in the service and construction sectors. A further distinction to be noted is the highly cyclical nature of construction employment while service sector employment has been more moderate in pace but far less volatile.

Manufacturing employment growth has been slowing. These patterns suggest that the demand for labor is increasingly focused on services while manufacturing employment is likely to continue to diminish as a share of national employment over time. This disparity suggests that the demand for labor is also influencing the type of workers needed.

What do employers want? Education, which leads to income disparity

Given the structural shift of demand in favor of services and away from manufacturing, what might we expect that employers want? The driving factor appears to be education (see chart below).


Both employment and earnings growth appear to reflect the driving influence of education. As seen in the graph, unemployment rates are significantly lower for college educated workers relative to high school graduates and especially high school dropouts. Moreover, data taken from the Federal Reserve's Survey of Consumer Finance suggests that the income disparity and growth of that disparity has grown since 1995. …

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