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Why We Have Fewer Jobs in the Information Sector Today Than in 2001

October 25, 2013 by Joshua Wright

HBR_Logo1In the November issue of the Harvard Business Review magazine, EMSI teamed up with Catherine Mulbrandon of Visualizing Economics and the HBR team to explore jobs in the information sector in an interactive feature entitled “America’s Incredible Shrinking Information Sector.”

The tree map graphic from Mulbrandon and analysis from EMSI chief economist Hank Robison walk through the information sector’s stunning employment decline in the 2000s, and its small job increases since 2011. The data for the piece comes from EMSI, specifically our staffing patterns that show the percentage of jobs in the industry that are in a specific occupation.

In 2001 the information sector in the U.S. comprised 3.7 million jobs, most in telecommunications and publishing industries. By the end of the decade, employment in information was under 3 million — a drop of roughly 750,000 jobs. On the surface, this job decline seems curious; information businesses have long been assumed to be an engine of the modern economy, as HBR put it.

But efficiency gains and widespread automation have reduced the employment needs for many information-related industries, like telecom, while the traditional publishing industry and others have been hurt by shrinking revenue streams. Consequently, the information sector lost more jobs than any every other sector except for manufacturing in the 2000s.

HBR_Information_2001 HBR_Information_2011

EMSI and HBR isolated five trends over the last decade-plus that tell the story of the information sector’s fall. For each, the graphic isolates the occupations most affected.

1. TRADITIONAL MEDIA’S COLLAPSE

Editors, ad sales agents, prepress technicians, and reporters and correspondents are among the evaporating roles that once supported publishers of books, newspapers, and even greeting cards. Traditional publishing lost 263,000 jobs from 2001 to 2011 (a 25% decline) and another 21,000 since (an additional 3%). Gains in online media jobs paled in comparison; they grew by a little less than 50,000 from 2001 to 2011 and 27,000 since. Media outlets are using fewer people to generate more content.

2. AUTOMATION AND SELF-SERVICE

Innovations like voice recognition and phone trees, in combination with offshoring, have pared down the number of customer service representatives, a segment where employment fell from 241,00 workers to 167,000 from 2001 to 2011. Meanwhile, thanks to the internet and the little computers people carry around in their pockets and purses, most American consumers can now perform on their own services like buying movie tickets and making catalog purchases, which used to require ushers and order clerks.

3. TELECOM’S DIGITAL EVOLUTION

Many assume that the telecommunications sector, which includes equipment installers and line installers, is going strong. But it lost a staggering 567,000 jobs from 2001 to 2011 (a 39% decline), and another 29,000 (3%) since. The reason: With the growth of wireless and labor-saving technologies, far fewer people are needed to deliver telecom goods and services.

4. CREATIVES ON THE RISE

Actors, entertainers, animators, writers, and musicians are among the information segments showing modest job gains, reflecting the fact that technology has greatly increased the number of consumer channels for content (and the demand for creative talent to fill them), even if it takes a smaller number of people to do the production and distribution work.

5. A COMPUTER JOBS DRAIN

Computer-related jobs, including programmers, hardware engineers, software engineers, and systems analysts, make up 16% of the information sector. This once-robust segment suffered mightily between 2001 and 2011, losing 19% of its jobs inside the information sector, more than 102,000 in total, to both to automation and offshoring. The possible good news: Losses have stabilized since 2011, and the sector has shown modest growth.

Note: The tree map is adapted from Mulbrandon’s book, An Illustrated Guide to Income in the United States, which features, among many other sources, EMSI data. For more on EMSI data, see this page or email Josh Wright.

Joshua Wright

Reach out at jwright@economicmodeling.com

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