Where Job Growth is Occurring

Included in some new work by my friends, UM economists George Fulton and Don Grimes, is an analysis of job growth in America from 2001-2008. They use the same framework we do by dividing the economy into high education attainment industries (those where thirty percent or more of the employees have a four-year degree or more) and low education attainment industries.

From 01-08 the US added 3.9 million new private sector jobs. Roughly three million in the high education attainment industries and nine hundred thousand in the low education attainment industries. When the 2009 statistics are available, the disparity will be even greater, because a large share of the job losses in this Great Recession are occurring in the the low education attainment industries. It is quite likely that when employment nationally bottoms, probably in 2010, that the country will have gone through an entire decade with no job gains in the low education attainment industries.

George and Don further dissect job growth by the wages industries pay. One category is low education attainment/average and above wage industries. This, of course, is the kind of industry that built middle class Michigan for the last century. Its what made us one of the most prosperous places on the planet. But its this segment of the economy that has the worst job growth performance. While private sector employment has grown by nearly four million nationally from 01-08, employment in low education attainment/average and above wage industries have shed more than one million jobs.

Its more compelling evidence that what made us prosperous in the past, won’t in the future. The path back to prosperity for Michigan and its people is in the growing part of the national economy: knowledge-based. There is no path back to prosperity based on high paid, low education attainment jobs!

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