Visualizing Earnings and Employment Over Time, by Metro and Industry

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In San Francisco, Tulsa, and Houston, earnings per job have risen at least 2% since 2010. That’s not show-stopping growth, but it’s much stronger than the performance of almost every other large metropolitan area — and of the United States in general.

EMSI and Tableau Software visualized the change in inflation-adjusted industry earnings and employment from 2001 to 2013 with two interactive graphics that are part of the launch of a new skills gap study from CareerBuilder. The biggest takeaway: earnings have flatlined in most areas of the country (and in many industries).

As a general rule, wages tend to be much more stable than employment. There are institutional factors, not to mention competition between industries, that make wage changes slow to occur over time. In contrast, job numbers will vary depending on the demand for employers’ goods and services.

The visualizations illustrate this characteristic. Some industries (oil and gas extraction, for one) have felt a talent pinch, which can be seen in the metros that specialize in these industries. For the U.S. as whole, though, average earnings fell 1.3% since the end of the recession (2010-2013). However, from 2001 to 2013, average earnings actually went up 3.4%.

Earnings and Jobs By Metro

The first visualization (see below and at this link) shows data for the 100 largest metros. Most of these metropolitan areas saw increases in industry earnings over the long period (2001 to 2013). But since 2010, the first full year after the recession, very few — seven in all, led by San Francisco — have seen earnings growth.

There are countless stories that can be culled from this graphic, as well as from the industry graphic in the next section. Here are a few:

  • Over the short period, 2010 to 2013, employment increased in all 100 metros, while only seven saw earnings increases.
  • San Francisco had by far the largest jump in average industry earnings from 2010 to 2013 (7%), followed by Tulsa (3%) and Houston (2%). Five others — San Jose, Seattle, Springfield, Mass., Oklahoma City, and Pittsburgh — saw increases of 1%. The biggest drivers of wage growth among these metros are the oil and gas boom (Tulsa, Houston, Oklahoma City) and the tech industry (San Jose, Seattle, San Francisco).
  • The biggest earnings decreases came in Palm Bay-Melbourne-Titusville, Fla. (-6%); Bridgeport-Stamford-Norwalk, Conn. (-5%); Las Vegas (-5%); and Poughkeepsie-Newburgh-Middletown, N.Y. (-5%).
  • Earnings growth is one metric that Austin doesn’t rank highly compared to other metros. Job growth has been stellar in the Texas metro, but average earnings have declined 4% since 2001 and 1% since 2010.
  • The metros doing the best in earnings and employment increases since 2001: Oklahoma City (15% earnings growth and 10% job growth), Bakersfield (8% earnings growth and 23% job growth), and Charleston (8% earnings growth and 20% job growth).
Earnings and Jobs by Industry

In a second visualization, we shifted focus from metro areas to specific industries. The industry data reflects the nation as a whole. You can flip between major industry sectors and the more detailed industries (4-digit NAICS) in each sector by clicking the tabs at the top.

The big takeaways from this graphic:

  • Since 2010, average earnings per job have grown the fastest in the information sector (4.3%), while employment has increased the most in mining, quarrying, and oil and gas extraction (25.6%).
  • The biggest jump in average earnings per job across the long period, 2001 to 2013, came in mining, quarrying, and oil and gas extraction (23.5%) and management of companies and enterprises (19.5%). However, despite the growth in jobs, since 2010 earnings per job have been flat in mining, quarrying, and oil and gas extraction (0.1% growth). Could this mean that people have flooded to North Dakota and other oil and gas hubs thereby keeping wages in check?
  • The biggest decrease in average earnings per job since the Great Recession, from 2010 to 2013, came in government (-3.3%). Workers in retail trade, meanwhile, saw a 7% drop in earnings over the long period, from 2001 to 2013, and a 2.6% drop from 2010 to 2013.

Beyond these highlights, there are other trends worth exploring for sectors and their sub-industries. We’ve broken out some of the big themes by sector.

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Manufacturing

Employment has plummeted 27% since 2001 in manufacturing. That’s not a new story. But average earnings per job have been mostly steady, actually increasing 7% over the long period 2001 to 2013. Manufacturing as a whole reflects a mix of relatively capital- and labor-intensive industries. Over the long period, the industries that have left have tended to be the labor-intensive ones – seeking cheaper labor overseas. That leaves an increasing share of capital-intensive manufacturers, requiring greater skills and thereby paying higher wages.

Information

Information has lost a quarter of its employment base since 2001, a stunning fall that stems from an acceleration of automation and technology change in this most technology oriented sector — something we explored last year. The jobs that remain require greater skills, reflected in higher salaries. The sector has seen the fourth-largest increase in average earnings over the longer period (2001 to 2013), and the largest earnings jump since 2010. The increases have been centered in a few sub-industries: data processing and hosting; cable and other subscription programming; and satellite communications.

Retail Trade

Average earnings per job in this sector have trended downward, and there are a few reasons that manifest themselves when looking at detailed retail industries. In the automobile dealers sub-industry, for example, sales reps rely on commissions, and new car sales have only started to pick up post-recession. Hence, earnings dropped sharply in 2008 and 2009, and have barely picked up since then. Automotive parts stores, meanwhile, has seen an uptick in employment the last few years — partly because more people are holding on to cars longer and trying to do repairs on their own. But earnings have fallen while employment has risen, a likely reflection of the increasing prevalence of the “warehouse auto parts store.”

Clothing stores have also seen a consistent decline in real average earnings and a rise in jobs. This points to more people working at clothing warehouses and chain stores with the fading away of clothing boutique shops. Average earnings for clothing stories is under $18,000 per year, a drop of around 15% since 2003.

Grocery stores are an example of retail that pays less because of skills-saving technology — grocers have been able to hire more unskilled workers with enhancements in automation (self-checkouts, easier-to-run cash registers, etc.). This skills-saving technology, with its depressing effect on wages, is contrasted with labor-saving technology that tends to increase wages (manufacturing, for example).

Health Care

The health care and social assistance sector has seen an almost uninterrupted rise in employment since 2001, largely because of the aging of the population. Yet it’s more of a mixed bag for earnings. Some industries, like general medical and surgical hospitals, have experienced rapid earnings growth, perhaps reflecting use of advanced technologies. Yet in offices of physicians and others, average earnings have been relatively flat or going down.

Management of Companies and Enterprises

The management of companies and enterprises sector includes private equity firms and others that hold the securities of companies for the purpose of owning controlling interest. This sector does well in a growing economy — its employment and average earnings have each gone up 19% since 2001, and only information has seen a bigger earnings increase since 2010. Earnings were hit hard during the recession because much of employees’ income is in the form of bonuses, but it has bounced back nicely since the start of the recovery.

New Skills Gap Research

As we noted above, the infographics were done in conjunction with new research on the skills gap from CareerBuilder, EMSI’s parent company. The skills gap isn’t an across-the-board problem in the U.S. Some employers have plenty of qualified applicants to choose from (particularly those who offer competitive wages). Some regions don’t suffer from a shortage of talent in manufacturing, IT, health care, and other common sectors with gaps.

With all that said, though, more businesses are starting to address the issue themselves. CareerBuilder found that nearly half of employers surveyed are planning to train new hires this year, up from 39% in 2013. And 54% of surveyed employers have vacancies for which they can’t find the right candidate.

Full details from CareerBuilder can be found on its 2014 skills gap study website and in the video below.

Data and analysis for this post comes EMSI, which offers the most comprehensive, current, and granular labor market data available. To explore getting historical earnings or employment data for your region, email Josh WrightFollow us on Twitter @DesktopEcon.

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