Job growth in the food service industry

What does America make? Increasingly, at least in terms of the number of workers, the answer is food:

In 1990, manufacturing was almost three times larger than the food service industry. But restaurants have gradually closed the gap. At current rates of growth, more people will work at restaurants than in manufacturing in 2020. This mirrors the shift in consumer spending. Restaurants’ share of America’s food budget has doubled from 25 percent in the 1950s to 50 percent today.


Yet, as Derek Thompson notes, our national rhetoric is still stuck in the era of factories and manufacturing:

But the most important feature of the restaurant jobs boom is not what it may say about the future, but rather the fact that it is happening in the first place. Trump and other politicians often say they want to help the common worker. But then they talk about the economy as if it were cryogenically frozen sometime around 1957. The U.S. still makes stuff, but mostly it serves stuff. To help American workers, it helps to begin with an honest accounting of what Americans actually do.

The jobs landscape has experienced much change in the last half century. Certain sectors – such as the tech industry or manufacturing – consistently receive a lot of attention. But, could someone unite the interests as well as depict a group to the public at large that would include restaurant workers, service workers, and nurses (among other fields that have grown tremendously)?

Suburbs to respond to companies returning to cities

Another new issue facing suburbs – in addition to homelessness – is how to respond when companies move their headquarters back to cities:

In Chicago, McDonald’s will join a slew of other companies — among them food giant Kraft Heinz, farming supplier ADM and telecommunications firm Motorola Solutions — all looking to appeal to and be near young professionals versed in the world of e-commerce, software analytics, digital engineering, marketing and finance…

Aetna recently announced that it will relocate from Hartford, Conn., to Manhattan; General Electric is leaving Connecticut to build a global headquarters in Boston; and Marriott International is moving from an emptying Maryland office park into the center of Bethesda, Md…

The migration to urban centers threatens the prosperity outlying suburbs have long enjoyed, bringing a dose of pain felt by rural communities and exacerbating stark gaps in earnings and wealth that Donald Trump capitalized on in winning the presidency…

Long term, the corporate moves threaten an orbit of smaller enterprises that fed on their proximity to the big companies, from restaurants and janitorial operations to subcontractors who located nearby.

It is difficult for any community – whether big city or suburb – to adjust to the move of a large firm out of the community. A number of things are lost: prestige, jobs, philanthropic contributions, and tax revenue. Arguably, suburbs lose more compared to big cities that have broader and more diverse economies: the headquarters in the suburb might be a sizable community anchor.

This may be similar to when suburbs with once-thriving shopping malls try to figure out what to do with that space. It can be difficult to fill the property all at once so suburbs might have to take their time and move one small step at a time.

I’ve argued before that this whole city-suburb competition for headquarters could harm both in the long run as it takes the focus away from a metropolitan effort to encourage business growth. On the whole, it matters less if a company moves from the Chicago suburbs to downtown than if the company decides to leave the entire region for another location. If more businesses move back to major cities, could suburbs find some way to work together to prevent moves? Or, or is the sometimes cutthroat competition between suburbs impossible to stop?

Automated jobs could reduce tax revenues

I don’t know how accurate these figures are but it is an interesting argument: people might worry about losing jobs to automation but what about losing tax revenues?

The United States is in danger of losing more than one-third of its tax base thanks to increasing automation in both manufacturing and service sectors. Self-driving vehicles, self-serve kiosks, increases in manufacturing and energy production efficiency, and declining retail numbers all contribute to what is likely going to be a significant problem in the coming decades…

Conservative estimates put future job losses at 20 million with some estimates going up to as high as 70 million. When someone loses their job, they stop paying taxes, while their employers stop paying payroll and other types of taxes at the same time. Compounding the issue is the fact that many people who lose their jobs start to depend on the economic support of the government, along with their families…

A growing population and dwindling jobs will result in much higher levels of unemployment in working-age adults than we see now. To top it off, the number of people on either side of the working-age spectrum (under-18, over-67) are growing substantially. Something has to give at some point, whether that means the advent of a basic income system or substantial corporate/capital taxes, the transitional period we are currently in cannot last forever.

Something to keep an eye on. I could imagine this causing particular problems at the local level as less federal and state money is available at the same time that residents may have a harder time paying property taxes and other local fees.

The most common job in 37 states

Moving goods around the country requires a number of drivers:

More than 3 million people drive trucks in the United States. In fact, according to Steve Viscelli, author of “The Big Rig: Trucking and the Decline of the American Dream” and a lecturer in the Department of Sociology, it’s the No. 1 occupation in 37 of 50 states.

Americans don’t generally pay much attention to infrastructure but the trucking industry may be lower than average on the list of infrastructure components. Outside of complaining about large trucks on the road (driving next to them, the noise they generate), it is difficult to remember that so much of what we purchase comes at least part of the way through trucks. And if trucking all moves to self-driving vehicles, perhaps trucking will become even more faceless.

But, perhaps one way we will hear about the future changes in trucking: a significant loss in jobs. Will drivers be able to transition to new jobs better than millions of manufacturing workers or others who have lost jobs because of a changing economy in recent decades?

Majority of American jobs in the suburbs

An analysis at New Geography shows the metropolitan locations of American jobs:

The 2014 data indicates that more than 80 percent of employment in the nation’s major metropolitan areas is in functionally suburban or exurban areas (Figure 3). The earlier suburbs have the largest share of employment, at 44 percent. The later suburbs and exurbs combined have 37.0 percent, while the urban cores have 18.9 percent, including the 9.1 percent in the downtown areas (central business districts, or CBDs).

These numbers reveal dispersion since 2000. Then, the earlier suburbs had even more of the jobs, at 49.4 percent, 5.3 percentage points higher than in 2014. Virtually all of the lost share of jobs in the earlier suburbs was transferred to the later suburbs and exurbs, which combined grew from 31.4 percent in 2000 to 37.0 percent in 2014. The urban cores had 19.4 percent of the jobs (8.8 percent in the CBDs), slightly more than the 18.9 percent in 2014.

While Chicago is one of the cities with a higher percentage of jobs in the city, Sun Belt locations dominate the list of cities with more jobs in outer suburbs:

These figures counter claims or stereotypes that (1) suburbs are primarily bedroom communities where people sleep but work in the city and (2) urban cores are the primary job centers of metropolitan regions. Of course, some suburbs are bedroom suburbs and big city downtowns are still important, particularly for certain industries (think global finance). At the same time, it would be interesting to envision some of these Sun Belt cities with no downtown…how different would Raleigh or Atlanta or Orlando really be?

More Chicago suburbs hiring staff

Perhaps this is another sign of a more positive economy (and more tax dollars): some suburban governments are hiring again.

According to a Daily Herald analysis of 61 suburbs, 31 of them added the equivalent of 139 full-time jobs during the fiscal year that ended April 30, 2015, for most suburbs and Dec. 31, 2014, for others.

But 16 suburbs eliminated the equivalent of 46 full-time jobs and 14 towns held the line on the head count from the previous year, the analysis of the suburbs’ most recent audits show…

Still, the vast majority of towns are operating with much smaller staffs than just a few years ago. At its peak seven years ago, employment by the 61 towns was nearly 10 percent higher with the equivalent of 13,251 full-time jobs, compared to a low point of 11,977 full-time equivalent positions two years ago, according to the analysis…

According to the analysis of the audits, the 61 towns in suburban Cook, DuPage, Kane, Lake, McHenry and Will counties first saw significant job reductions in 2010, when they reduced their workforces by 3.8 percent.

While this analysis is interesting, more background might be helpful. Suburban governments today have to balance efficiency (meaning keeping tax increases small or cutting the budget) and quality of life (the suburban life that many of the residents who moved to the community want to continue and enhance). This is not easy to do; residents tend to want more for their money and many might be convinced that government can always cut waste (or at least cut the money they don’t personally care about or benefit from). But, at some point, employees are needed.

This article suggests that a number of the new hires in suburban communities are part-time employees to limit the benefits costs. I’d be interested to see data on whether having more part-time employees in local government leads to better service and community outcomes.

Recession decimated construction workforce

Here is another sign the construction industry has not fully recovered from the economic crisis: the number of construction workers is still low.

The new-construction housing market is slowly recovering from the turmoil of the recessionary years, but builders haven’t been able to pick up where they left off. More than 2 million skilled labor jobs were lost to the economy, and many of those workers are gone forever…

Nearly 30 percent of the construction workforce disappeared during the Great Recession, reports FMI Corp., a Raleigh, N.C., provider of management consulting, research and investment banking to the construction industry. Among its ranks are plumbers, electricians, roofers, bricklayers and carpenters.

The shortage seems to be worsening. According to FMI’s 2015 “Talent Development in the Construction Industry” survey, 86 percent of respondents reported shortages of skilled labor. That’s up from the 2013 survey, in which 53 percent of respondents reported such shortages.

It may take a long time before the housing industry approaches where it was in the early to mid-2000s. In the meantime, those workers have to do something and/or go elsewhere. Even with all the political talk about helping workers, I don’t remember anyone suggesting plans for helping construction workers in the same way that politicians have discussed manufacturing workers.

Additionally, I wonder what it takes to ramp up with a lot of new workers if the housing industry starts booming again. Businesses today tend to shed workers when times are bad, add when the economy picks up, and disregard training and upstart costs. However, it is not always simple to just hire large numbers of laborers.