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Job Growth Spreading to Higher-Paying Industries

Job Fair
Flickr User Mark Warner

Most of the job growth in 2011 was concentrated in industries that tend to pay low wages and skimpy benefits. But toward the end of the year, and especially in December, hiring became broader-based and included more higher-paying jobs.

That trend bodes well for the economy if it holds up. “It’s clear that the skilled end of the labor market has heated up,” said Paul Ballew, chief economist at Nationwide.

Two-thirds of the 1.6 million jobs created last year were in five industries: health care; hotels and restaurants; retail; manufacturing; and temporary help. Except for manufacturing, most of the jobs in those sectors don’t pay a lot.

Average hourly wages in the leisure and hospitality industry, made up mostly of hotel and restaurant workers, was $13.31 in December, for example. That compares with $23.93 in manufacturing.

Average hourly retail pay was $15.97. These industries hired more aggressively than others:

– Health care. People get sick and need medical attention regardless of economic trends. An aging population also boosts demand for health-care workers.

– Hotels, restaurants and retailers and manufacturers. Each of these industries benefited from rising consumer spending. After years of wringing more productivity out of their workers, companies in these sectors finally needed to add staff.

– Temporary help. Cautious employers are reluctant to make permanent hires.

In a healthy sign for the economy, job creation picked up in the second half of the year in a few industries that generally pay higher wages, including: oil and gas drilling; information technology; and professional services such as accounting, architecture and consulting.

Oil and gas extraction added 25,000 jobs last year. Accounting and bookkeeping services added 61,000 jobs. Throughout 2011, hiring was weakest in financial services, information, and government. Governments cut 280,000 jobs. The information industry shed 36,000.

The information category is a hodgepodge that includes publishing, the movie industry, broadcasting, telecommunications and some online companies such as Web search engines.

Job gains among online companies were offset by cuts in areas like telecom. Phone companies are cutting technician jobs that focus on landline connections because about one-quarter of households now use only wireless phones.

Hiring by industry in 2011

(in thousands)

Dec. 2010 Dec. 2011 Pct. Change .

*Change Mining and logging 734 825 12.4% 91

*Professional and business services 16,902 17,354 2.7% 452

*Temporary help 2,207 2,304 4.4% 97

*Health and education services 19,760 20,187 2.2% 427

*Health care 13,922 14,237 2.3% 315

*Leisure and hospitality 13,074 13,342 2.0% 268

*Restaurants, hotels 11,177 11,451 2.4% 274

*Manufacturing 11,565 11,790 1.9% 225

*Retail trade 14,447 14,687 1.7% 240

*Wholesale trade 5,480 5,564 1.5% 84

*Transportation and warehousing 4,268 4,335 1.6% 67

*Construction 5,498 5,544 0.8% 46

*Financial activities 7,617 7,624 0.1% 7

*Government 22,252 21,972 -1.3% -280

*Information 2,694 2,658 -1.3% -36

(Copyright 2012 by The Associated Press. All Rights Reserved.)

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