Employment – Page 3 – Economic Thinking In Action

Using U.S. BLS location quotient to study job concentration within a given labor market

Job location quotients are ratios that compare the concentration of a particular job in a defined area to that of a larger area. For example, job location quotients compare MSA employment to that of the nation.

For instance, the BLS shows that employment per thousand jobs for JOB 1 is 0.41 in AREA 1. In the nation as a whole, the employment per thousand for JOB 1 is 0.13. The job title location quotient in this example is 3.09 = (0.41)/(0.13) .

The location quotient in this example is the ratio of the area concentration of occupational employment to the national average concentration. A location quotient greater than one indicates that the occupation has a higher share of employment than average, and a location quotient less than one indicates the occupation is less prevalent in the area than average.

Just move already…geographic mobility and economic opportunity

In Chapter 6 of Moretti’s book ‘Geography of Jobs’, he argues that geographic mobility is a key to economic prosperity. The ability and willingness to move from an economically depressed area to a more robust one benefits not only the individual who moves but also the individuals and businesses in both areass.

Prof. Moretti points out that a number of countries that have low geographic mobility rates also have low economic activity measures. He uses his home country Italy as an example of a country where people do not move. Most interesting he makes the case for national mobility voucher program in the U.S.. The idea is that subsidizing a person’s move will help equalize economic opportunities across the nation. He closes the chapter discussing gentrification which he views as a good thing given all the pluses that arise from it.

Texas job openings increased from May 2014 to June 2014

The number of job openings in Texas increased from 342,800 in May 2014 to 343,517 in June 2014. The median number of job searchers per job opening across all MSAs (metropolitan statistical areas) and occupations in Texas was 1.29 in May 2014 and 1.47 in June 2014.

Significant new government compensation data reporting requirements on the way from the OFCCP

Seyfarth Shaw LLP and a number of other OFCCP watchers reported recently on Office of Federal Contract Compliance Programs (“OFCCP”) notice of proposed rulemaking (“NPRM”) that would require most Federal contractors and first-tier subcontractors to submit compensation data to the OFCCP through a web-based filing system on an annual basis. The stated goal of the new data is to provide the OFCCP better data to monitor and analyze the pay of men and women in the workforce.

According to Federal Register, Vol. 79, No. 153, August 8, 2014, the OFCCP’s new data requirement will require contractors and subcontractors to provide:

The total number of workers within a specific EEO-1 job category by race, ethnicity and sex;
Total W-2 wages for all workers in the EEO-1 job category by race, ethnicity and sex; and
Total hours worked by all employees in the EEO-1 job category by race, ethnicity and sex.

The Department of Labor estimates that the the total cost of the rule change is $50,009,885, $46,250,189 will be first year cost.

Moretti’s economic tale of two cites: where Microsoft is now and Albuquerque

In Moretti’s book, he provides a detail study of how innovation jobs can be economic driver and dictate the economic future of a town, city or region.

Moretti discusses where Microsoft (MSFT) is now , Seattle, and Albuquerque, NM. These two cities embody the natural experiment that he suggest shows the impact of innovation jobs. In short he shows how one town has grown and blossomed and the other has not.

He points to three factors that have lead to the drastic divergence.

1 Job Creation. The sheer number of innovation jobs created by Microsoft both directly and the tradition jobs that were created indirectly.

2. The MSFT millionaires. These millionairies changed the landscape of Seattle as they started their own companies in around the city (and the industry).

3. The Hubs. According to Moretti cities like Seattle have become ‘Hubs’ that attract other businesses. Many businesses find that the existence of other companies both in their industry (competitors) and related companies attracts other companies and makes it easier for them to do business

What’s the latest on the economic impact of outsourcing?

Outsourcing

According to Moretti, economic studies have generally found that outsourcing is a net good for the U.S. economy.

According to Moretti, many of the outsourced services are complements and not substitutes for the services that we use locally in the U.S.

In addition to citing several economic studies on the topic, Moretti uses the case study of Oracle. According to Moretti, In 2000 Oracle had 22,008 U.S. workers and 20,919 workers abroad. In 2014, as the company grew the number of jobs outsourced also grew.. By 2014, Oracle had 40,000 in the U.S. and 60,000 abroad.

According to Moretti, this was a net gain for the U.S. even though clearly outsourcing has increased for Oracle. Many of the U.S. jobs created by Oracle jobs are high paying jobs. Also, he further shoes that many of the jobs, like routine computer software programmers, were jobs that helped U.S. workers do their jobs better as opposed to replacing the work of native U.S. workers. Further the multiplier effect resulted in many support jobs being created in the U.S.

Unemployment Rate for Eagle Ford Shale Production Counties Increased from April 2014 to May 2014

The unemployment rate for the 14 Eagle Ford Shale core production counties went up from 5.3% in April 2014 to 5.5% in May 2014.

EagleFord_map1

eagle_ford_ur_2014_05

Image source: http://www.aei-ideas.org/2012/12/texas-eagle-ford-shale-map-and-chart/

What is the innovation sector? Thoughts on Moretti’s book ‘The New Geography of Jobs’

Enrico Moretti’s book “‘The New Geography of Jobs” discusses how certain jobs, which he refers to innovation jobs, and where they are located are important factors for economic development. Using data and economic research as support, he provides numerous arguments that suggest that these types of jobs are big economic drivers and dictate the economic fate of many communities.

So what are innovation jobs? Moretti defines innovation jobs as jobs that make intensive use of human capital and human ingenuity. These jobs includes the obvious like high tech software jobs but also less obvious like jobs in the movie industry that make use of high tech and personal creativity.

Throughout the book Moretti argues that the typical innovation job is worth more substantially more than traditional jobs. That is one reason why he believes we should not be concerned about the loss in the traditional types of jobs.

Job Openings in Texas for Petroleum Engineers, Technicians, and Personnel Decreased from April 2014 to May 2014

The number of job openings in Texas for “petroleum engineers” and “geological and petroleum technicians” decreased from 672 in April 2014 to 640 in May 2014, while the searcher-to-job opening ratio increased from 0.74 to 0.90 in the same span.

The number of job openings in Texas for “derrick operators” and “roustabouts” decreased from 294 in April 2014 to 283 in May 2014, while the searcher-to-job opening ratio increased from 2.54 to 2.63 in the same span.

Image source: http://wonderfulengineering.com/what-is-petroleum-engineering/.

Texas Job Openings Decreased from 361,597 in April 2014 to 342,800 in May 2014.

tx_2014_05 The number of job openings in Texas decreased from 361,597 in April 2014 to 342,800 in May 2014. The median number of job searchers per job opening across all MSAs (metropolitan statistical areas) and occupations in Texas was 1.12 in April 2014 and 1.29 in May 2014.