One of the reasons why the July jobs report was hailed as such good news for the U.S. labor market was the quality of jobs that were added. Of the 255,000 new jobs last month, 70,000 came in professional and business services and 43,000 came in health care, with the majority of those in ambulatory health care services and hospitals and not the lower-paying nursing and residential care facilities.
The growth in professional and business services was particularly striking, so we wanted to put the 70,000 new jobs in context. As Ben Casselman noted at FiveThirtyEight, it was the fastest-growing sector in July. But that’s just one month of growth using preliminary figures from the Current Employment Statistics (CES) survey, otherwise known as the payroll or establishment survey.
What’s the longer trend with professional and business services? We checked our labor market database—which integrates government datasets like CES and the more robust Quarter Census of Employment and Wages to provide insights for every county and ZIP code in the nation.
What is Professional and Business Services?
First, let’s take care of a definition issue. The BLS considers professional and business services a supersector that includes three 2-digit NAICS sectors:
- Professional, scientific and technical services (NAICS 54)
- Management of companies and enterprises (NAICS 55)
- Administrative and support and waste management and remediation services (NAICS 56)
Professional and business services accounted for just under 19.5 million jobs at the end of 2015. Nearly half of the jobs were in the top five sub-industries: temporary help services (2.8 million), management of companies and enterprises (2.2M), computer systems design (1.9M), janitorial services (1M), and offices of lawyers (1M).
So in addition to the accountants, lawyers, and other white-collar occupations in professional and business services, there are also janitors (over 960,000 of them), security guards (714K), hand laborers (632K), and other blue collar-like jobs.
Also note that since temporary help services is lumped in with high-tech industries like computer systems design services—one of the R&D- and STEM-intensive advanced industries identified by Brookings—average earnings for the supersector are misleading. On the whole, Casselman is correct—these are good jobs. But temp help services pays, on average, $35,569 per year (this includes salaries and benefits for temp workers employed by staffing agencies, as well as the CEOs and everyone else employed by those agencies). That $35K pales in comparison to $122,313 average earnings for computer system design.
How Much Has It Grown?
Professional and business services grew 5% from 2013-2015, expanding by 993,000 jobs. That’s an average of 27,500 jobs per month the last three years. So the 70,000 new jobs in July, if it holds up through the revision process, is pretty phenomenal. Especially since it was in mostly higher-paying industries—professional and technical services added 37,000—and not as much in temporary help services (17,000).
Where Is the Growth?
The above chart shows data for the five states that added the most jobs in professional and business services from 2013-2015 (the highlighted portion). Texas laps the field in percentage growth since 2001, which is when the chart starts, and it led the top states with 9% growth the last three years. Florida and Georgia have also done well, growing 8%. California has the most payrolled business locations, or establishments, in the supersector at 183,600. And New York has the highest average annual earnings ($102,025) of the top states.
Texas is the star state for professional and business service jobs. But on percentage terms, Tennessee, Kansas, and Nevada grew slightly faster from 2013-2015.
Tennessee is an interesting case study. Nashville did well in Brookings’ new analysis of advanced industries, which also looked at 2013-2015 job growth. Yet for the larger professional and business services supersector, Tennessee’s growth was led by temp jobs (9,700 of 35,000 new jobs). Telephone call centers, another lower-paying industry in the supersector, added nearly 2,500 jobs.
But sandwiched between temp services and call centers among Tennessee’s professional and business services cluster were three high-paying, key industries, including computer systems design (see table).
|NAICS||Description||2013 Jobs||2015 Jobs||2013 - 2015 Change||2013 - 2015 % Change||Current Total Earnings||2015 Location Quotient (1.00=Natl. Avg.)|
|Source: Emsi 2016.2 (QCEW Employees)|
|56132||Temporary Help Services||85,276||94,968||9,692||11%||$28,307||1.66|
|55111||Management of Companies and Enterprises||35,909||40,926||5,017||14%||$119,068||0.93|
|54161||Management Consulting Services||11,786||16,779||4,993||42%||$88,843||0.85|
|54151||Computer Systems Design and Related Services||15,564||18,223||2,659||17%||$98,782||0.48|
|56142||Telephone Call Centers||10,837||13,284||2,447||23%||$37,881||1.29|