A Graphic Look at Secure and Insecure Industries

Wednesday, June 1, 2011

Right now I’m working on a book called 150 Best Jobs for a Secure Future, which is intended to take the place of 150 Best Recession-Proof Jobs. I received a lot of media coverage, including face time on several TV networks, when Recession-Proof came out, thanks to the efforts of JIST’s crackerjack publicist, Selena Dehne, and also because the book came out just as the recession was taking its heaviest toll and the subject of the book thus had newsworthiness.

Now that I’m working on a similar concept, I’m trying to benefit from hindsight. Did all 150 occupations included in the book weather the recession with no layoffs? Of course not. In fact, almost every occupation you can think of has a certain number of layoffs and dismissals, even in good times. Think of layoffs as like body temperature: There’s a certain rate, like our normal 98.6 degrees, that can be considered healthy. A better question to ask is whether some of the occupations in the earlier book experienced a considerable uptick in layoffs, a feverish recessionary level. Sadly, some did, but that’s not surprising. The Great Recession was ever so much worse than any we have experienced since the 1930s, and some occupations that are barely affected by normal recessions did experience a higher level of job loss.

One lesson that I learned from the previous book is that in considerations of job security, it is helpful to think not only in terms of occupations but also in terms of industries. Some industries are much less sensitive to the ups and downs of the economy than others. That’s something I stated in the earlier book, but this time I’m constructing the lists of best jobs based on industry-specific data for occupations. So, for example, a given occupation may appear as tenth on the list of best jobs in educational services but as twenty-second (or maybe not at all) on the list of best jobs in government.

I’ve used several lines of research for selecting the most secure industries, but perhaps the most dramatic is the graphic that appears below. (This ties in nicely with my blog of two weeks ago, in which I discussed the importance of graphicacy--skill with using and understanding visual representations.)

Layoff and Discharge Rates (Percent) in Selected Industries

Source: JOLTS database, BLS

I created this graph from data I downloaded from the Department of Labor’s Job Openings and Labor Turnover Survey (JOLTS). It shows the average annual percentage rate of layoffs and discharges in several major industries over the previous decade. The first thing you should notice is the bold black line, which represents all private-sector industries. You’ll note that over the course of the last decade, it starts out flat (at around 1.7%), coasts down along a very slight mid-decade dip, trends upward beginning in 2007, hits a peak in 2009, and then slopes downward, reaching about the lowest point of the previous decade. The impact of the Great Recession is obvious, and this is the line against which you should compare the other lines in the chart.

Now let’s focus on the lowest and flattest lines on the chart. The star performer here is the bold robin’s-egg blue line that represents education and health care, which maintains a steady rate of between 8.0% and 9.0% over the course of the decade. You can barely see the recessionary uptick that appears along almost all the other lines. You can be sure I’m going to include this industry (actually, the two smaller industries it subsumes) in the book I’m working on now.

Government, the pink line, is another interesting industry to observe. It begins the decade with the lowest rate of all, 0.5%, and maintains the lowest rate until the very end of the decade. Note that it actually slopes downwards slightly from 2007 to 2008, when almost every other industry is beginning to see increased layoffs. It parallels the other industries in sloping upward after 2008, but it is unique in that it continues this upward slope even after the private-sector industries start seeing diminished layoffs. It’s not hard to understand why you’re seeing increasing government layoffs here: reduced tax revenues and politicians who have experienced an overnight conversion to deficit hawkishness. Nevertheless, I’m going to include government as one of the industries in the new book, because there are several kinds of government workers (such as in law enforcement) that are essential and will not be dismissed unless we are prepared to model our country after Somalia.

Note also the green line that partially overlaps with the robins’-egg blue education and health care line. This is finance and insurance. You’ll observe that it’s a little more volatile than education and health care, but it still shows fewer perturbations than most of the other industries and overall maintains one of the lowest rates of layoffs and discharges.

The most sensitive industry on this chart, with the widest swings and a very high layoff rate to begin with, is construction, the red line. But the one that particularly fascinates me is the yellow line for arts, entertainment, and recreation, which keeps changing places with construction as the industry with the highest layoff rate. This industry is the most countercyclical of all those shown here, actually doing better as the recession sets in. I’m not going to include either of these two industries in the book.


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