Life and Death in the Labor Market

Bad News First

We found The Wall Street Journal’s recent piece on the Top 10 Dying Industries, via IBISWorld, pretty interesting. As the WSJ describes it, some industries didn’t just see temporary decline during the recession – some won’t recover and will slowly (or quickly) disappear. IBISWorld’s data format is a little different than ours, and its categories are somewhat obscure, but we thought it would be interesting to pull together a similar table with the associated job data.

With one major exception, all of these industries have seen some shakeup. But loss by itself doesn’t tell the full story. Wired telecommunications carriers lost the most jobs, but are tied with newspaper publishing for the second smallest percentage change on the list. This is probably because they’re entrenched industries and will take longer to become totally obsolete. Contrast those industries with photofinishing. Photofinishing has been a smaller industry all along, but their percent loss is at 68%. Consider the last time you looked at snapshots that weren’t digital, and then say a little prayer for the photofinishing industry.

Description 2001 Jobs 2010 Jobs Change % Change
Wired Telecom. Carriers 1,038,230 709,179 -329,051 -32%
Mills 487,344 208,526 -278,818 -57%
Apparel Manufacturing 273,650 127,175 -146,475 -54%
Newspaper Publishing 428,659 289,997 -138,662 -32%
DVD, Game & Video Rental 167,526 84,442 -83,084 -50%
Record Stores 84,884 30,416 -54,468 -64%
Photofinishing 66,170 20,901 -45,269 -68%
Manufactured Home Dealers 43,203 19,430 -23,773 -55%
Formal Wear & Costume Rental 19,889 12,217 -7,672 -39%
Video Postproduction Services 26,098 26,319 221 1%

The one industry on this list that is not like the others is video postproduction services. As we mentioned earlier, there’s not an exact relationship between our industry groups and those used in this study, so where they’ve found overall decline we’ve found slight growth. The interesting thing is that this industry goes to one more digit of detail and splits in half to become teleproduction and other postproduction services and then other motion picture and video Industries. The teleproduction industry is growing by 2,573 jobs and then the other motion picture industry is losing 2,352 jobs. There’s pretty much an inverse relationship between these two industries, and that’s where that slight gain comes from. In the report from IBISWorld that the Wall Street Journal article references, IBIS points out that digital postproduction is a very important, but that most groups simply don’t farm that work out and do it in house. This might mean that what we’re seeing in this data is some of that shift, especially since the job gain and loss is so directly proportional.

Is There Life in Manufacturing?

Before we get to the better news, let’s look at a quick reminder about what manufacturing has been doing over the past 10 years. From 2001 to 2010 the manufacturing sector lost 4.7 million jobs nationally. Pretty dismal. However, there are industries in the sector that show growth. If we look from 2001-2010 the top 10 industries look like this:

Description 2001 Jobs 2009 Jobs 2010 Jobs 2001-2010 2009-2010
Wineries 27,531 47,117 46,850 19,319 -267
Perishable Prepared Food Manufacturing 24,584 36,785 36,962 12,378 177
Oil and Gas Field Machinery and Equipment Manufacturing 48,327 61,698 59,673 11,346 -2,025
Ship Building and Repairing 92,336 103,526 100,841 8,505 -2,685
Surgical and Medical Instrument Manufacturing 107,547 115,938 115,721 8,174 -217
Ethyl Alcohol Manufacturing 3,272 9,797 9,708 6,436 -89
Plastics Packaging Film and Sheet (including Laminated) Manufacturing 5,879 11,782 12,302 6,423 520
Digital Printing 20,894 27,531 27,308 6,414 -223
In-Vitro Diagnostic Substance Manufacturing 13,444 19,916 19,458 6,014 -458
Spice and Extract Manufacturing 16,126 20,708 20,980 4,854 272

This still isn’t the good news. As the table demonstrates, most of the industries showing high growth from 2001 to 2010 have slackened considerably from 2009 to 2010, and many of them have declined. We would hope to be seeing some hint of recovery in these industries, but instead we’re seeing loss.

To zero in on industries showing current growth in the manufacturing sector, we’ll look at the top 10 industries showing the most growth from 2009 to 2010.

Description 2001 Jobs 2009 Jobs 2010 Jobs 2001-2010 2009-2010
All Other Plastics Product Mfg. 400,046 260,516 264,562 -135,484 4,046
All Other Motor Vehicle Parts Mfg. 167,487 106,257 109,069 -58,418 2,812
Automobile Mfg. 168,403 94,904 97,424 -70,979 2,520
Travel Trailer and Camper Mfg. 36,231 23,190 25,347 -10,884 2,157
Motor Home Mfg. 17,612 9,473 11,525 -6,087 2,052
Motor Vehicle Metal Stamping 111,209 55,426 57,470 -53,739 2,044
Wet Corn Milling 9,185 8,127 10,166 981 2,039
Motor Vehicle Seating and Interior Trim Mfg. 65,601 40,325 42,194 -23,407 1,869
Iron and Steel Mills 118,583 85,200 86,837 -31,746 1,637
Motor Vehicle Transmission and Power Train Parts Mfg. 96,132 53,644 55,109 -41,023 1,465

As you run over this list you’ll probably get the take away pretty quick. The lesson of this table is that the federal auto manufacturing bailout had an immediate positive effect. In an already declining industry sector the bailout has enabled auto manufacturing to recover, very slightly, after a long period of decline.

Of the three industries on this list not directly related to auto manufacturing (all other plastics mfg., wet corn milling, and iron and steel mills) only wet corn milling showed growth from 2001 to 2009. This means that nine of the top 10 manufacturing industries that have grown from 2009 to 2010 are industries showing a sudden turn-around, without a growth trend in place. Because these correlations are so close, we took a quick look at the relationship between auto manufacturing and iron and steel milling in our input-output model and did not find a strong industry tie. The same was true for auto manufacturing and all other plastics mfg.

Life vs. Death

First we looked at dying industries. Then we looked at industries within a dying industry sector that are recovering because of massive infusions of money from the government. Is it all really that depressing out there?

Of course, this isn’t a comprehensive look at industry growth. Everyone knows that the health sector is growing, and we’re starting to spot other reasons for hope. But the truth is that the US economy recently underwent a major shakeup, and hasn’t totally bounced back yet. As far as manufacturing goes, there’s not a ton of good news right now. But we’re going to keep tabs on it and let you know what we find.

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