Employment Change by Sector, August-September 2011

Let’s look at employment change in more detail. I charted the big picture yesterday. Here I present change between August and September by sectors of the economy.

The pattern here is much the same as for the last several months. The two categories that show steady increase are professional and business services and education and health services. The second of those is mostly health services—the one sector of this economy that’s marching right along—thanks to the aging Baby Boom generation.

The positive change in the Information sector is due to the end of the Verizon strike. Last month we had a loss there of 48,000 jobs, 45,000 of which the strike caused. The strike ended September 2. That added back the lost 45,000—but the net change in that sector is only 34,000, meaning that even Information lost jobs if we ignore the Verizon strike.

Once more, the big loser is Government, down another 34,000 jobs. Now it is well worth noting that employment in government is the only category of employment our political leadership actually directly controls. And this is the sector that consistently loses the most jobs month to month. Our politicians, therefore, don’t walk the talk. No, sir. To show you how this sector has performed in 2011, I present here another graphic.

This one shows, using an index (December 2010=100), how far employment has slipped in the nine months of 2011 we’ve clocked thus far. Every level of government has shed at least 1 percent of its employment in this period, the Federal and Local more than one. Local government is the largest of these categories. Now in economically troubled times demand for government services grows. We are responding by removing people who provide services at such times. We are not, collectively, behaving rationally.

Jobs by Sector, April-May 2011

Once more, as last month (here), I am showing employment change by sector. In the change from March to April, all sectors showed gains but one, Government. This month (April to May) five sectors show losses, the rest gains:

The source of the data shown is this BLS table. Note here especially the loss of 9,000 jobs in the retail sector. Last month that sector, alone, posted a higher gain in jobs than the entire economy this month (57,000 versus 54,000). This month retail gave some of those jobs back. The news speak of people being “shopped out” or having once more “lost confidence.” Not surprisingly. We don’t have a unified national policy. We’re pulling in opposite directions. Keynesian voices keen for more stimulus—but how can we stimulate when we’ve built our Tower of Debt to a nearly World War II percent of GDP by giving artificial respiration to the Finance Sector and fighting—is it two? is it three? is it four? wars all at once? Other voices shout Tax cut, Tax cut, Tax cut—and these voices are louder and winning; they’ve won the last election. But not the last by-election in New York—which really confuses things. Tax cutting has produced shrinking jobs in government. Last month the loss was 24,000; this month it is 29,000. That’s what job-growth by tax-cut looks like, stupidos.

Let’s take a closer look at the government losses. The federal sector actually had a gain of 1,000 jobs; state governments lost 2,000, and the locals 28,000. It’s worst closest to home! And it gets worse. Most of the government job losses (a shade over 60 percent) were experienced by local educational systems, 17,500! That’s where the tax-cuts are landing, folks: on teachers. And that’s starting to look down-right surrealistic. We can afford to build schools in Afghanistan and in Pakistan by means of aid—but we can’t keep our teachers on the job because we must shrink government? Is it any wonder that people have lost their confidence?

In times like these when unity of purpose is essential, our governance structure, designed deliberately to produce conflict, is not working to the benefit of the whole.

Hype and Reality

Since first publishing a monthly graphic (in December of 2009) based on the Bureau of Labor Statistics’ release of the employment change data, I have not shown the details underlying the single number that always makes the news. This month I’ve decided to do so. The reason for that, apart of the utility, sometimes, of seeing more details, was the current administration’s pronouncements about the April results. President Obama appeared on TV and talked about a gain of 268,000 jobs—whereas the number I reported, echoing the BLS, was 244,000. This startled me, at first—hence I went to look. Turns out that the President was concentrating on gains in private jobs and never mentioning that fact that these gains were balanced by a loss of 24,000 government jobs. They break down as follows: the federal government lost 2,000, the state governments 8,000, and local governments 14,000 jobs. These losses, needless to say, are due to failure of our elected officials to raise taxes in order to cover the services that they provide. Here is the graphic on details:

The top line, total nonfarm jobs gained, is the net of private gains and public losses. The second line is what the President was emphasizing.

Now there is no harm in emphasizing the positive, to be sure. But overstating actual gains by ignoring a sector of the economy, which suffered losses, does not raise my confidence. Rather the opposite. Aside from that, these data show some interesting trends. The big gains have come in the services providing sectors (209,000 jobs), much smaller gains in the basic sectors, the goods producing. In that category I include mining, construction, and manufacturing (a gain of 35,000 jobs). The leading gainer was retailing; it restored more jobs than our basic industries combined. When looking at the substantial gain in education and health services, we must keep in mind that virtually all actual teachers are classified as government—where job losses were shown in April. If we look at government jobs, we notice that the largest public sector occupation is elementary school teachers (as documented here). I consider them to be part of a basic industry as well.

The source data for the graphic may be found here.