The Nature of Employment Growth, 1989-95
Ilg, Randy E., Monthly Labor Review
The largest gains in job growth occured in the highest-paying occupations; increases also were posted in relatively low-earnings job categories and employment fell among the job categories in the middle
Although considerable job growth has occurred over the past few years, many labor market analysts have raised concerns about the quality of the employment gains. Data from the Current Population Survey clearly indicate that the increase in employment, though somewhat concentrated in relatively low-wage industries, has taken place in both relatively higher-paying and lower-paying occupations. And, while downsizing and restructuring have led to the displacement of many managers and professionals, considerable growth skill has occurred within these occupations. In fact, three-quarters of the net job growth between 1989 and 1995 occurred in the managerial and professional specialty occupations (36 and 39 percent, respectively).
This article examines the quality of employment growth, using earnings as the measure of job quality, for a group of 90 major industries and occupations. Unlike previous studies that have focused on changes in employment between two points in time, this analysis adds the dimension of a monthly time series. The findings reinforce the conclusion drawn from previous BLS research that employment growth has been greater for occupation-industry cells at the top and bottom of the earnings distribution than for those in the middle.(1)
Industry and occupation
Employment matrix. Occupational and industrial classifications often are used as proxies for job quality. Occupations or industries with high average earnings offer "good jobs" under one simplified scheme, while those with low earnings offer "bad jobs."
Assessments that have relied only upon industry or upon occupational data to portray the change in job growth over time can paint a limited, and perhaps distorted, picture. From an industry viewpoint, all of the net growth between 1989 and 1995 could be attributed to the employment change in services and retail trade--presumably low-paying industries.(2) (See table 1.) In contrast, from an occupational perspective, growth in the managerial and professional specialty groups (high-paying occupations) accounted for 75 percent of the employment change. This growth represents a vastly disproportionate increase, because managerial and professional specialty occupations made up only 26 percent of employment in 1989. Previous research indicates that occupational data crossed by industry offers a clearer understanding of the nature of job growth than do occupational or industry data alone.(3)
[TABULAR DATA 1 OMITTED]
From 1989 to 1995, total employment increased by 6.7 million, to 124.9 million. About four-fifths of that increase was in occupation-industry cells for which the median weekly earnings of wage and salary workers were above the median for all such workers ($394). Just where this growth occurred can be determined by examining the occupation-industry cells in detail. Table 2 presents the employment growth or decline for all occupation-industry cells.
[TABULAR DATA 2 OMITTED]
Because month-to-month changes in 90 series would be hard to track separately, they were ordered into a more manageable format. Individual data cells of this matrix were ranked in descending order by the median weekly earnings of all wage and salary workers in 1993.(4) The occupation-industry cells were then grouped into three categories-highest-, middle-, and lowest-earnings-that each accounted for approximately one-third of total employment in 1988.(5) An employment time series for each occupation-industry cell from January 1989 to December 1995 was developed and these were sorted into the appropriate earnings group.
Time series analysis. Further information on employment growth in the three groups is obtained from the time series presented in chart 1. …