Williston, North Dakota: Boom Town

Employment is growing at a faster rate in Williston, North Dakota than anywhere else in the U.S.  Williston is located in northwest North Dakota, about 70 miles south of the U.S.-Canadian border.  Northwest North Dakota is the center of the Bakken oil boom, which has dwarfed any other energy booms in North Dakota and Montana.  The employment boom in Williston over the past two years is one of the most dramatic since the U.S. Department of Labor began collecting local employment and unemployment data.

Williston is a small city (a micropolitan area according to the Census Bureau) where employment grew modestly from 1990 to 2005 and by 10% per year from 2005 to 2010, despite the global recession.  Growth in Williston really began to take off about two years ago.  The unemployment rate in Williston is 0.7%, or 1/11 of the U.S. unemployment rate.  Over the past two years employment has grown by more than 40% per year which is 26 times faster than in the rest of the U.S. and over 29 times faster than growth in Williston prior to 2005.  To put this into perspective employment in Williston is now increasing by the same number of jobs every four days that used to be created each year from 1990 to 2005.

The following chart shows that employment has doubled in Williston in the past two years.  Between 1990 and 2005 employment grew in Williston at an annual rate of 1.37%.  Over the past two years employment in Williston has grown by 2.86% per month.

Willis1

There are growing pains associated with the employment boom.  The latest data from the Williston police department indicate that both property crimes and violent crimes have increased substantially in Williston, but roughly in proportion to the increase in employment.  The following charts compare the growth in crimes reported by the Williston Police Department to the growth in employment.

Willis2

Willis3

Williston is the quintessential energy boom town.  Employment is growing at an astronomical rate.  Wages are also rising — starting pay for high school graduates now tops $50,000 in the energy boom areas in North Dakota and Montana.  The average weekly wage in North Dakota has risen by 27.1% over the past three years, or 5.2 times faster than in he U.S. overall.  As employment has grown so quickly in such a short time the cost of rental housing has soared and the number of violent and property crimes have increased substantially.  These are just some of the growing pains associated with an economic boom.

Hurricane Sandy’s Impact on Layoffs

On Friday the BLS reported the highest number of mass layoffs (seasonally adjusted) in over three years.  In November the number of workers filing first time unemployment claims because of a mass layoff was about 33% higher than the average number of new claims per month over the previous year.  The BLS reported seasonally unadjusted data by state which indicated that half of the 122,000 increase in new claims from November 2011 to November 2012 occurred in New York, New Jersey and Pennsylvania.  In year-over-year comparisons new jobless claims in November 2012 were:

  • 156% higher in Pennsylvania than one year ago
  • 345% higher in New York than one year ago
  • 710% higher in New Jersey than one year ago

The 6.5% Solution? Why the Unemployment Rate is an Unreliable Target for the Fed

The Federal Reserve Board is making a mistake by using the unemployment rate as a target for monetary policy.  I write this as a labor economist not an expert in monetary policy.  My criticism is not about whether the Federal Reserve should have a dual mandate.  Instead, I question whether the official unemployment rate is the best measure of labor market activity that Ben Bernanke and the Fed could use as their target.

Last week the Federal Reserve Board said that it would continue quantitative easing and keep interest rates low by purchasing $85 billion in Treasury securities per month at least until the official unemployment rate falls to 6.5%.  The Department of Labor reports six different measures of labor underutilization denoted U-1 through U-6.  The official unemployment rate, U-3, only include jobless workers who are willing and able to work and actively searched for a job in the past four weeks.  As Gary Becker noted on his blog, the unemployment rate is a flawed indicator of the state of the labor market because jobless workers may have become discouraged and stopped looking for work

Unemployment measures are sensitive to movements of jobless workers from the official category of “unemployed” to jobless and non-employed because they have, at least temporarily, stopped looking for work.  This means that the unemployment rate can fall for the wrong reasons; i.e. because unemployed workers gave up their job search and not because more people found jobs.  Consequently most labor economists use some variation of the employment to population ratio as a more robust measure of labor market activity.  At Welch Consulting we have constructed such an employment index that corrects for changes in the age distribution of the population and the difference between part-time and full-time employment.  The Fed should consider using a similar employment index as their labor market policy target.

For example, it appears that more than half of the decline in the unemployment rate in the past two and a half years, from 9.6% in May 2010 to 7.7% today, has been for the wrong reasons.  Since May 2010 the labor force participation rate has fallen from 64.9% to 63.6%; the adult population increased by 6.68 million and the labor force grew by only 1.08 million.  In other words there are 5.6 million more adults classified as “Not in the Labor Force” compared to May 2010.  Some of these adults are discouraged workers (and therefore counted in U-5 and U-6).  Others gave up looking for work more than twelve months ago and are not counted in any official Labor Department measure of underemployment.  Moreover, the employment to population ratio is 58.7% today, the same as it was in May 2010.  This means that in the past two and a half years employment has grown just in proportion to the adult population.

However, the official employment to population ratio reported by the BLS understates the gains in the labor market in the past 30 months for two reasons.  First, a higher percentage of jobs today are full-time than in May 2010.  Second, the aging of the workforce means that a larger fraction of adults are leaving the labor force for retirement.  The Welch Consulting Employment Index indicates that aggregate employment has grown about 1% faster than population after adjusting for the aging workforce and gains in full-time employment.  In contrast a decline in the unemployment rate from 9.6% to 7.7% over the past 30 months would have resulted in a 2.1% increase in employment had the labor force participation rate remained at its May 2010 level.  Consequently more than half of the apparent gain in the unemployment rate over the past 30 months is due to people leaving the labor force as they gave up their job search.

The last time the U.S. unemployment rate was 6.5% was October 2008.  Ben Bernanke has indicated that monetary policy could change once the unemployment rate drops to 6.5%.  Unfortunately, the difference between the health of the labor market today and in October 2008 is grossly understated by the 1.2% higher official unemployment rate today.  For example, the Welch Consulting Employment Index has declined by 4.25% since October 2008.  This means that in order to reach the same labor market activity as in the fall of 2008 full-time equivalent employment would have to increase by 4.25% (holding constant the adult population) and more than that as the population grows. Put simply the economy is short 6.1 million full-time jobs relative to October 2008.

The Fed does not expect the unemployment rate to decline to 6.5% until the end of 2015.  But changes in fiscal policy could cause the unemployment rate to drop rather suddenly, not because people find jobs, but because the long-term unemployed may stop looking for work.  What could cause this change?  Congress and the President could curtail the EUC2008 extended unemployment insurance program which allows unemployed workers to continue collecting unemployment insurance benefits for up to 99 weeks (in some states and some cases).  Typical benefits expire after 26 weeks, but the EUC2008 program has extended benefits for many jobless workers for at least 78 weeks over the past four years.  Currently about 2.2 million long-term unemployed workers collect EUC2008 benefits.  If these benefits are curtailed and 2 million of these jobless workers stop looking for work, the unemployment rate would immediately fall to 6.5%.

It is unlikely that all recipients of extended benefits will stop looking for work immediately after their EUC2008 benefits expire.  But once active job search is no longer a prerequisite for collecting benefits many unemployed workers will curtail their search, leave the labor force and lower the unemployment rate.  Once the EUC2008 program ends, it is quite conceivable that the unemployment rate will decline to 6.5% within a year despite a very weak labor market for many workers.

I leave it to macroeconomists and monetary economists to debate whether more quantitative easing can help stimulate real output and employment growth.  However, the Fed is wrong to link monetary policy to an unemployment rate that can increase when the labor market improves (and people resume their job search) and decrease when the labor market weakens (and people give up their job search).  Looking ahead it is more important how the economy reaches a 6.5% unemployment rate rather than the rate target itself.  The Fed’s policy guidance would be easier to comprehend if a better target was used for labor market activity.  A properly constructed employment index, that accounts for the changing demographics of the workforce, provides a much more accurate measure of the labor market’s strength.

Government Employees Now Have Higher Homicide Rates than Private Sector Workers

The victims of the tragic and horrific mass murder at Sandy Hook Elementary School in Newtown, Connecticut included six school employees who died trying to save the lives of their students.  Sadly, this horrible crime underscores the fact that the homicide rate for government employees has risen in the past few years.  Government employees now face a higher risk of being murdered on the job than private sector workers.

The Bureau of Labor Statistics maintains detailed records on workplace fatalities, including homicides, in their Census of Fatal Occupational Injuries.  While the data for 2011 are still preliminary (and subject to revision in 2013), 458 workers were homicide victims in the workplace in 2011; 368 of the victims worked in the private sector and 90 were government employees.  This represents a departure from as recently as 2003 when 561 private sector workers and 71 government workers were homicide victims.  Between 2003 and 2011:

  • Homicides in private sector workplaces have decreased by 26%
  • Homicides of government employees have increased by 27%

Government employees were about 20% of homicide victims in the workplace in 2011 despite the fact that they represent only about 15% of total employment (with private sector wage and salary workers and the self-employed accounting for the remaining 85%).  This means that the homicide rate per employee is now 39% higher for government workers than it is for private sector workers.

One reason for the high homicide rate for government workers is that the public sector includes many high risk occupations in law enforcement.  Over the past decade 70% of the homicides of government workers were to police, law enforcement and correctional institution employees.  Even excluding these high risk occupations over the past decade the workplace homicide rate increased in the government sector while it has declined in the private sector.

The homicide rate in private sector workplaces is less than one-third of the rate in 1992 (the first year the BLS published these data).  Government workplaces are also safer than they were in 1992; the homicide rates for government workers in 2011 was 24% lower than in 1992.   It is noteworthy, however, that all of the declines in workplace violence in the government sector occurred between 1992 and 1999.

hom

Private sector employers have substantially reduced the homicide rate in their businesses over the past two decades.  In contrast there has been no increase in workplace safety in the public sector over the past decade.  While private sector workplaces are the safest they have been since the BLS began collecting these data 20 years ago, many public sector workers in the front lines of law enforcement face a high risk of workplace violence.  A troubling trend over the past decade is that the homicide rate for government workers, outside of law enforcement, has not declined as it has in the private sector.

Note: I use the Current Population Survey to measure annual employment for government workers, private sector wage and salary workers, and self-employed individuals and use these figures to construct the homicide rates per employee in the chart above.  I have excluded the homicides on 9/11 and the Oklahoma City bombing in 1995 from the chart.

Private Sector Hiring is Slowing Down

According to the Bureau of Labor Statistics JOLTS data (Job Opening and Labor Turnover Survey), private sector hiring, while still ahead of 2011, has slowed.  The JOLTS data record information on the number of persons hired by establishments and not merely total employment.  Thus the JOLTS data can provide information on whether companies are hiring new workers and replacing workers who have left their jobs or whether they are holding back on hiring.

According to the JOLTS data there were 12.73 million workers hired by private sector employers from August through October in 2012.  This represents only a 1.34% increase from the same three months in 2011.  The increases for 2009-2010 and 2010-2011 were 5.03% and 6.92% respectively, for the same three-month period.  Moreover the number of workers hired remains 16% lower than it was in 2007, before the recession.  Hiring in goods-producing industries (mining, construction and manufacturing) actually fell by 4.3% in the past year to the lowest level since 2009.

The slowdown in hiring may be due to uncertainty about the economy, including the budget negotiations in Washington.  Another sign that economic uncertainty may be impacting the labor market is that the pace at which workers are quitting their jobs has slowed down as well.

The number of workers quitting their jobs is an important indicator of how sure workers are that they can find a new higher-paying job.  When the labor market is booming more workers are willing to quit their jobs for better opportunities.  From 2009-2010 and 2010-2011 the number of private sector workers who quit their jobs increased by 12.2% and 9.7% respectively (based on data from August through October of each year).  In the past year the number of workers quitting their jobs increased by only 1.5% and remains about 26% below pre-recession levels.

The non-farm total payroll employment data from the BLS indicate that the economy has added about 136,000 private sector jobs per month over the past six months – or just enough to keep pace with population growth.  The JOLTS data indicate that the pace at which companies are hiring workers and the pace at which workers are quitting their jobs has slowed, after two years of solid increases in both hires and quits.

The labor market recovery is still fragile.  Both employers and workers may be holding back on decisions awaiting the outcome of Federal budget negotiations and the resolution of uncertainty about tax rates and government spending.  If the policy compromises by Congress and the President raise the cost of doing business, including the hiring and retention of workers, the gains in employment we have seen over the past two years could be reversed in 2013.

Amazon, Technological Change and Taxing Capital Investment

On Sunday Paul Krugman wrote that while corporate profits have rebounded well since the recession, output is growing too slowly and employment to population ratios for working age men and women remain depressed.  As a consequence labor now receives a lower share of national income than in it has historically.  Krugman explained his concern: “The pie isn’t growing as it should – but capital is doing fine by grabbing an ever-larger slice at labor’s expense.”  Krugman put forth two possible explanations for the shift in income from labor to capital: robots (labor-saving technology that has displaced workers) and robber barons (increased monopoly power).  I find the argument that technological change has had a big impact on the wages and employment of the working class much more compelling.  Krugman’s op-ed points out how technological change has affected a wide cross-section of industries reducing the demand for skilled labor in some industries and unskilled labor in others.  He also argues that technological change may be a reason to oppose tax reform that lowers corporate rates and the marginal tax rate on the financial returns from capital accumulation.

This post focuses on technological change in the retail sector.  Before turning to a discussion of economic policies, consider the recent histories of Amazon and traditional bookstores.  I make this comparison even though Amazon now sells much more than books and e-books, and traditional booksellers have also changed their mix of products and increasingly rely on online sales.  As I explain below, as with any technological change, there have been winners and losers.  In this case the losers include Borders bookstores, a company that no longer exists, and its former employees.  The winners include investors in Amazon, who stayed with the company through the dot-com collapse, and the skilled employees at Amazon and other online retailers that have used information technology to transform the retail sector.

In 2004 the combined revenue at the two largest bookstore chains, Barnes and Noble and Borders, exceeded sales at Amazon by 63%.  In 2004 Barnes and Noble and Borders employed over 75,000 workers between the two companies and Amazon had 7,800 total employees.  This meant that in 2004 while traditional bookstores were selling $114,000 of merchandise per employee per year, Amazon had annual sales of $675,000 per employee — about 6 times as large.  It would have been difficult for traditional bookstores to maintain this wide of a disparity in sales revenue per worker even if they offered a much different in-store customer experience than online retailers were able to offer on their websites.

One could say that Amazon contributed to the demise of Borders and the 50% decline in employment at traditional bookstores since 2000.  But Amazon did not cause this change but instead they anticipated a change in the buying habits of consumers because of changes in information technology.  The following chart tracks the monthly share price of Amazon stock (adjusted for dividends and splits) with the six month moving average of employment at bookstores according to the Bureau of Labor Statistics.  Investors in Amazon profited from a new technology and way of delivering products to consumers.

Amazon1

Amazon has forced traditional retailers to be more efficient in their use of labor.  Barnes and Noble now sells $204,000 of merchandise per employee, an increase of 33% (adjusted for inflation) since 2004.  This still pales in comparison to Amazon’s $855,000 in sales per employee, but the gap has narrowed.  Amazon’s success has meant phenomenal growth in employment at the company as well as its market value.  The following chart shows how Amazon’s end of year employment has grown in proportion to its market value.  As Amazon investors have made money the company has hired more and more employees.  It should also be noted that the increase in Amazon employment has been steadier than the increase in its stock price.  For example between the end of 1999 and the end of 2001 during the dot-com bust, the value of Amazon stock plunged by 86% while employment increased by 2.6%

Amazon2

The jobs and skill requirements at Amazon (which now has over 56,000 employees compared to Barnes and Noble’s 35,000 employees) are different from traditional retailers.  The customer experience for online shoppers, for better or for worse, is also different from what it was two decades ago at brick and mortar retailers.  One thing is clear: many fewer employees are required to generate each $1 million in retail sales than would have been required two decades ago.  I (along with most economists) view this as a tremendous opportunity for our society.  Fewer human resources are required to facilitate transactions between producers and consumers.  The human capital diverted from traditional retail operations can now be redirected to higher valued uses.  However the change illustrated by the rise of Amazon and the decline in retail employment per million dollars of sales presents a challenge for our education system.  As new kinds of job opportunities arise our schools need to prepare the next generation of workers for an ever-changing environment.

Could the Federal government have done something to impact the big changes caused by technology in the retail sector?  Should the Federal government have considered a bailout or some other sort of assistance for Borders and its employees?  I believe that policies to tax the winners from investments in technological change in order to mitigate the damages of the workers harmed by the same change in technology will ultimately be counter-productive.  As Krugman argues in his op-ed, the winners and losers vary from industry to industry depending on the specific change in technology.  Government policies that attempt to identify winners to tax and losers to subsidize are fraught with problems.  The ultimate determinant of the success of retailers, and the job security of their employees, will be the consumer.  The managers of traditional and online retailers are focused on customer satisfaction and matching the prices and quality of service of their competitors, and not what share of income accrues to workers or investors. 

Krugman believes that the working class will benefit from higher taxes on corporate profits and higher marginal tax rates on the returns from financial investments.  He therefore advocates more general tax increases rather than specific policies to pick winners and losers.  Presumably the taxes collected on investors will accrue to workers through more and better government-provided entitlement programs.  An opposing argument is that the employment prospects and wages of workers in the U.S. will be enhanced by investments in technology that, when successful, will also lead to corporate profits and higher financial returns.  Of course there is no guarantee that investments in new technologies by American companies will be in facilities located in the U.S.  At the same time investments by foreign corporations may take place overseas or at facilities located in the U.S.  This is why the most sensible policies to increase the chance that U.S. workers can benefit from new technologies are tax and regulatory reforms that make facilities in the U.S. the most attractive investment options for both domestic and foreign companies.

Note: The employment and sales figures for Barnes and Noble, Borders and Amazon come from their annual reports.  Amazon share price data are from Yahoo Finance.

Will Michigan’s Right-to-Work Law Mean Larger Declines in Union Membership?

Michigan is about to become the 24th state with a “right-to-work” law.  A “right-to-work” law makes union dues voluntary by prohibiting closed union shops in the private sector.  In a closed shop workers represented by a union are compelled to pay union dues.  Once the law is signed in Michigan, workers represented by new collective bargaining agreements are free to decline paying union dues.   The Michigan law would make existing union-employer agreements exempt from the prohibition on closed shops.  An argument in favor of the Michigan law is that companies considering alternate locations for a new plant, factory or facility will face the same right-to-work environment in Michigan as in southern and western states.  For those who believe that states in the industrial Mideast have lost jobs in capital-intensive industries because of differences in labor laws, this law makes Michigan more competitive.  It is also notable that Indiana, the most manufacturing state in the country, enacted a right-to-work law in 2012.

It is surprising that Michigan has enacted a right-to-work law because from 2010-2012 it had the fourth highest union membership rate in the country behind Nevada, New York and Alaska.  Nevada is the right-to-work state with the highest union membership rate.  Nevada, Michigan and Indiana are the only right-to-work states with private sector union membership rates above the national average of 6.9%.  About 45% of total U.S. employment will now be in right-to-work states, where the average private sector union membership rate is 4.4%, less than half of the union membership rate of 8.9% in the other 26 states.

The following chart shows the uphill battle that private sector unions are likely to face at the ballot box in the years ahead.  Workers under the age of 35, who are becoming a more important force in elections, have not been members of private sector unions and therefore may be less likely to oppose right-to-work legislation.  Fewer than 3% of workers under the age of 35 in right-to-work states are union members.  Fewer than 6% of workers under 35 are union members even in states without right-to-work laws.

michigan_union

Given the age gap in union membership, it should not be surprising if right-to-work laws are considered by legislatures in other states.  Politicians in states competing for new businesses and jobs will continue to make the argument that jobs are being lost overseas and to states where unions are less of a force.  As long as job creation is a primary concern legislatures will consider laws that will weaken the strength of private sector unions.

Does the NFL Have a Crime Problem?

The horrific crimes committed by NFL players in the past ten days have prompted many to ask a logical question: Does the NFL have a crime problem?  The tragic murder of Kassandra Perkins by Kansas City Chiefs linebacker Javon Belcher, who committed suicide in front of coaches and team personnel, cast a pall over last weekend’s games.  This weekend Josh Brent was arrested for drunk-driving and manslaughter for a car accident that killed Cowboys teammate Jerry Brown.  While police are still investigating why Belcher killed the mother of his young daughter and took his own life, Brent had been arrested in college for drunk-driving making the tragic accident that killed Brown even more senseless and depressing.  All NFL players should not be painted with a broad brush, despite the inexcusable actions of Belcher and Brent.  NFL players are arrested about one-fourth as often as men age 22 to 34 in the general population.

Over the past decade there have been 489 arrests of NFL players for offenses more serious than speeding (and lesser traffic violations).  These data are based on the San Diego Union Tribune’s arrests database for NFL players that I update with a recent story by Fox Sports.  On average this amounts to one arrest per 35 players per year, or about 1.5 arrests per team per year.  The arrest rate for NFL players has averaged about 2.9% compared to 10.8% for men age 22 to 34 (based on FBI crime data by age for men in 2009).  Commissioner Roger Goodell is not satisfied with an arrest rate that is merely below the average for men in the U.S.  As the graph below indicates arrests of NFL players were increasing until Goodell became commissioner in 2006.  Since then the number of NFL players arrested per year has fallen by about 40%.

NFL_Crimes

All players are not equally likely to be arrested.  A simple analysis of the arrest data establish a clear difference in arrests by position:

  • Wide Receivers accounted for more than 1 out of 6 arrests
  • Cornerbacks accounted for about 1 out of 7 arrests
  • Linebackers accounted for 1 out of 8 arrests
  • Punters and Kickers accounted for 1 out of 82 arrests
  • Offensive Guards accounted for only 1 out of 98 arrests

There are also clear differences in arrest rates by team.  Four teams had substantially more arrests than the NFL average of about 15 arrests every 10 years.  Over the past decade 36 Minnesota Vikings, 29 Tennessee Titans and 28 Cincinnati Bengals and Denver Broncos have been arrested.  The Arizona Cardinals, New York Jets and San Francisco 49ers had less than half as many arrests as the typical NFL team since 2003.

It should  be emphasized that for NFL players (and all persons arrested), an arrest is only an arrest and does not mean that the player was guilty of the crime for which he had been arrested. 

The serious and tragic crimes committed by NFL players in the past 10 days are shocking and disturbing to sports fans.  However, a closer look at arrests of NFL players shows that they have a much lower arrest rate than men of a similar age in the general population.  Moreover, the arrests of NFL players have fallen by 40% in the past six years as Roger Goodell has made it a priority to reduce bad behavior off the field.  NFL players should not all be judged based on the serious crimes committed by two players.

Note: In 2009 the FBI reported 2.88 million arrests of men age 22 to 34 for offenses more serious than speeding and traffic violations (but including drunk-driving).  the Census Bureau reports that the civilian population of men age 22 to 34 was about 26.6 million in 2010.

Despite Drop in Unemployment Rate the Welch Consulting Employment Index Declined in November

The Welch Consulting Employment Index is 94.6 for November 2012, down from 94.8 in October.  The slight decline is due in part to the impact of Hurricane Sandy in New York and New Jersey.  The employment index dropped despite the fall in the U.S. unemployment rate because fewer people were working in November, as a fraction of the total population, compared to October.  An index value of 94.6 means that full-time equivalent employment (from the BLS household survey) is 5.4% below its level in the base year of 1997, after adjusting for both population growth and changes in the age distribution of the labor force.  The index has recovered from sharp declines in the summer of 2012 and is the same as it was in February 2012.  This means that full-time employment has kept pace with population growth over the past nine months.  Over the past five years the Welch Consulting Employment Index has fallen 6.3% (it was 101 in November 2007).

The Welch Consulting Employment Index, disaggregated by gender, is 92.5 for men and 97.3 for women.  Both the indices for men and women are down slightly from October.  Over the past nine months the men’s index is up 0.3% while the women’s employment index is down 0.3%.  Over the past five years the men’s employment index has declined by 7.2% and the women’s index has declined by 5.4%.

Welch_Index0

Welch_Index_gender

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey.  The Welch index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the 1997 base year.  The Welch Index adjusts for population growth by fixing total population to its 1997 level.  Seasonal effects are removed in a regression framework using monthly indicator variables.

The Resurgence in U.S. Manufacturing

Data recently released by the Bureau of Labor Statistics indicate that the U.S. ranked 7th among 19 countries in the increase in manufacturing output between 2009 and 2011.  Manufacturing output grew 16% in the past two years.  The highest growth in manufacturing occurred in Singapore and Taiwan.  Among European countries Sweden and the Czech Republic had the fastest growth in manufacturing.  Manufacturing output actually fell in the past two years in Australia and grew at the slowest rate in Denmark, Norway and France.

 MFG1

The U.S. ranked 6th in worker productivity gains in the manufacturing sector between 2009 and 2011.   The five countries with the fastest productivity growth were the countries with the biggest growth in manufacturing output.  Australia was the only country where worker productivity fell.  Worker productivity grew at the smallest rate in Belgium, Canada and Norway.

 MFG3

Manufacturing employment (measured by total worker hours) fell in 8 of the 19 countries reported by the BLS.  Manufacturing employment grew by 2.2% in the U.S. between 2009 and 2011 and that was enough to rank 6th.  The fastest growth in total employment in manufacturing occurred in Taiwan, Germany and South Korea.

MFG2

In summary, the U.S. has ranked near the top of developed countries in manufacturing growth between 2009 and 2011.  The growth in manufacturing since 2009 in the developed world has been fueled primarily by productivity gains rather than by increases in manufacturing employment.  Output, employment and productivity in manufacturing has grown more rapidly in Asian countries such as Taiwan and South Korea than in Europe.  Australia has lagged other developed countries in terms of manufacturing growth since 2009.

Follow

Get every new post delivered to your Inbox.

Join 1,227 other followers

%d bloggers like this: