NCPA - National Center for Policy Analysis

EPF Analysis: High Pay Job Growth In The Service Sector

July 1, 1998

Along with job creation, the quality of jobs has been increasing at a rapid pace, say Employment Policy Foundation economists. And most of these higher-paying jobs are in the service sector.

A recent study by the Bureau of Labor Statistics (BLS) analyzed job quality by tracking employment growth in 90 major occupation and industry categories since 1989. The job categories were grouped into three tiers based on earnings.

  • The BLS data show that between 1989 and 1997, employment in the highest paying third of jobs grew by 19 percent.
  • This was almost twice the rate of growth in the lowest paying third, 11 percent.
  • Employment in the middle paying third grew by only 1 percent.

Since 1993, employment growth has been even more rapid in the highest-paying jobs.

  • The highest-paying third of jobs grew by 14 percent, more than twice the rate of growth in the lowest-paying third, 5 percent.
  • Employment in the middle-paying third -- which fell during the recession -- grew by 4 percent, and dividing this middle third shows that growth was three times as rapid in the top half.
  • Thus, nearly three-quarters of employment growth since 1993 has occurred in the higher-paying half of all jobs.

Recent employment growth has been rapid in the services industry, and 70 percent of services growth occurred in high paying occupations -- "executive, administrative and managerial" and "professional specialty" (see figure).

Source: "Job Quality Improves as Expansion Continues," E-Mail Trends, July 1, 1998, Employment Policy Foundation, 1015 15th Street, N.W., Washington, D.C. 20005, (202) 789-8685.


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