NCPA - National Center for Policy Analysis


November 1, 2004

With 1.25 million jobs added to the payrolls since January, consistently outpacing population growth for the first time in four years, it appears that job growth is rebounding and the so-called jobless recovery is complete. Economist Daniel Aaronson examines what types of jobs are being created:

  • Considering the 14 "supersectors" of the economy, industries that pay above the national average accounted for about 75 percent of total employment growth, despite representing 65 percent of total employment.
  • Expanding the analysis to 84 sectors, above-average wage sectors added 41 percent of recent employment gains, while constituting 51 percent of total employment.
  • Historically, job growth occurs slightly faster in lower wage sectors than higher wage sectors in recession months, while they grow at roughly the same pace during expansion months.
  • Overall, job growth is occurring in high- and low-wage sectors in a fairly typical way given where the economy is in the employment cycle.

Aaronson cautions that due to the limitations in the data, such as the way employment surveys broadly define and categorize jobs as well as the omission of non-wage benefits and other job characteristics, calculations on the type of job creation must be approached with some skepticism.

Source: Daniel Aaronson, "Employment Growth in Higher-paying Sectors," Federal Reserve Bank of Chicago, Chicago Fed Letter No. 206, September 2004.


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