Service Sector

Service Sector Leads Job Recovery

If you work in retail, technology, telecommunications, insurance, entertainment or a variety of other types of business, you’re among the largest workforce sector in the United States. In fact, the Coalition of Services Industries reports that the services sector employs more than three-quarters of all working Americans.

Construction, by comparison, only employs 6 percent, while government employs 5 percent.

The Coalition of Services Industries recently launched an interactive map to display impact of the services sector in each state. Using data from the U.S. Census Bureau, the map provides a glimpse of the workforce by sector and type. In Virginia, for example, 2.9 million people – out of 3.8 million civilian employees ages 16 and over – are employed in the services sector. Florida, Nevada and New York have the highest percentages of services employment – 82 percent of the workforce in each state.

Services jobs are also considerably greater than manufacturing jobs in most states, even in traditional manufacturing states, such as Michigan, Ohio, Arkansas, Tennessee, Pennsylvania, Texas and New Jersey, the report states.

Given this data, along with the nation’s monthly jobs numbers, it appears the services sector is leading the recovery of jobs. And the Los Angeles Times reports that this isn’t surprising to economists because “the United States has long been shifting to a service economy as manufacturing jobs are automated and go overseas, and mining becomes less labor intensive.” The article states that economists point to the boom in services as a sign that households are spending money again since many services sector jobs tend to be jobs based on consumer spending habits.

The article quotes Francisco J. Buera, a professor at UCLA’s department of economics, who says many service sector jobs are high-skilled and well-paying and that low-skilled service jobs are shrinking. In his paper, The Rise of the Service Economy, Buera explains his theory that demand shifts toward more skill-intensive output as productivity rises, which increases the importance of market services relative to home production. To explain his theory, he uses data to show a rising level of skill and price of services linked to skill premium.

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