Academic journal article Monthly Labor Review

Job Growth in the 1990s: A Retrospect

Academic journal article Monthly Labor Review

Job Growth in the 1990s: A Retrospect

Article excerpt

The long economic expansion fueled job growth during the period, while new technology had mixed effects; the employment divide between the goods- and service-producing sectors of the economy continued to widen

The U.S. economy sank into recession early in the 1990s and then rebounded with the longest running expansion in the Nation's history.(1) Real gross domestic product (GDP) growth slowed in 1990 as the country slipped into recession. By 1992, however, recovery began and GDP grew throughout the remainder of the decade. Nonfarm payroll employment increased by nearly 21 million workers during the decade.(2)

Employment in export-sensitive industries followed a cyclical pattern, turning down for the 1990-91 recession and the later Asian economic crisis. Reduced defense spending resulted in job losses in defense-related industries, especially early in the decade. While the number of workers declined in these goods-producing industries, construction and related industries began to slowly recover in 1992, and strong employment growth resumed by mid-decade. Technology and demand for more services drove employment up in the service-producing sector.

Productivity improved as new and cheaper computer technology was applied in all sectors of the economy. Businesses transformed their systems to meet Y2K deadlines and to compete with lower priced foreign goods resulting from economic crisis in Asia. Inflation remained largely in check throughout the decade, with moderate gains in consumer prices. Even after adjusting average hourly earnings for inflation, U.S. workers saw their real wages increase. Low interest rates spurred new construction and refinance activity. Technology stocks helped create record profits in the stock market and boost the wealth of many households. Consumer confidence rose to new heights and remained strong through the end of the decade.

The private service-producing industries accounted for nearly 90 percent of the job growth in the 1990s and increased their share of total nonfarm employment by more than 4 percentage points. (See chart 1.) All major industry divisions within the service-producing sector added workers and growth was especially strong in the services division. (See chart 2.) Employment in the goods-producing industries edged up slightly, as losses in manufacturing and mining nearly offset gains in construction.

[Charts 1-2 OMITTED]

Mining employment sinks lower

The mining industry lost nearly a quarter of its workforce during the 1990s, with most of the losses occurring in coal mining and oil and gas extraction. Of the two, coal mining lost relatively more workers, 40.6 percent, while oil and gas extraction lost the greatest number of workers, 88,100. (See table 1.)

Table 1. Employment change by Industry, 1989-99

[Numbers in thousands]

                                                       Change
SIC
code        Industry           1989      1999     Number    Percent

            Total nonfarm     107,884   128,786    20,902      19.4

07,10-87,   Total private      90,105   108,616    18,511      20.5
89,99

10-39       Goods producing    25,254    25,482       228        .9

10-14       Mining                692       535      -157     -22.7

10          Metal mining         55.7      45.3     -10.4     -18.7

12          Coal mining         143.7      85.4     -58.3     -40.6

13          Oil and gas
            extraction          381.0     292.9     -88.1     -23.1

14          Nonmetallic
            minerals,
            except fuels        111.2     111.8       0.6        .5

15-17       Construction        5,171     6,404     1,233      23.8

15          General
            building
            contractors       1,331.8   1,450.1     118.3       8.9

16          Heavy
            construction,
            except building     767.0     869.1     102.1      13. … 
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