Knowledge-based sectors adding jobs fastest

For my Wayne State presentation we updated data on job growth since the start of the Great Recession in December 2007. From then through March 2012 the country has lost 5.1 million jobs.

What we did is divide the economy into three: private sector industries with employees who have high education attainment (those sectors are: wholesale trade, information, finance and insurance, professional services, corporate headquarters, education services, and health and social services), private sector industries with employees who have low education attainment and government. Here is what we found:

  • High education attainment private sector industries: 700,000 jobs gained
  • Low education attainment private sector industries: 5,400,000 jobs lost
  • Government: 400,000 jobs lost

Over the same time period – December 2007 through March 2012 – Michigan has lost 260,000 jobs, divided this way:

  • High education attainment private sector industries: 10,000 jobs lost
  • Low education attainment private sector industries: 210,000 jobs lost
  • Government: 40,000 jobs lost

Since the Great Recession began Michigan trails the nation in terms of employment change in each of the three sectors. But the pattern is the same: employment in the private sector knowledge-based (high education attainment) industries held up better in the downtown and have fared better in the expansion both nationally and in Michigan.

For Michigan the record is:

  • High education attainment private sector industries: 60,000 jobs lost (5.3%) from the start of the recession to its low in April 2010, then 50,000 jobs gained since. Since the start of the Great Recession employment is down 0.8%
  • Low education attainment private sector industries: 330,000 jobs lost (14.7%)  from the start of the recession to its low in February 2010, then 120,000 jobs gained since.  Since the start of the Great Recession employment is down 9.3%
  • Government: 40,000 jobs lost from the start of the Great Recession and still falling. Since the start of the Great Recession employment is down 5.9%

If anything, the decades long trend of the American economy transitioning from a factory-based to a knowledge-based economy accelerated in the Great Recession and is continuing in the recovery. It continues to be hard to imagine how Michigan regains its status as a high prosperity state that it enjoyed for most of the 20th Century without much faster growth in the high education attainment private sector industries.

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Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.