Goal: Creating 20 Million Jobs By 2020

Jobenomics - Goal: Creating 20 Million Jobs By 2020

Jobenomics Employment Report: August 2014

Jobenomics Employment Report: August 2014

By: Chuck Vollmer

6 August 2014

Jobenomics tracks both unemployment (see: Jobenomics Employment Scoreboard: August 2014) and employment (this posting).   Download PDF versions: Jobenomics Unemployment Report - August 2014 and Jobenomics Employment Report - August 2014.

Executive Summary.   According to the August 2014 Bureau of Labor Statistics (BLS) Employment Situation Summary[1], the unemployment rate increased slightly to 6.2%, total nonfarm payroll employment rose by 209,000, and the “not in labor force” category (citizens who can work but don’t) decreased by 119,000, for a net gain of 328,000, which is more than the commonly used 250,000 benchmark required for a sustained economic recovery.  Jobenomics rates this monthly report as very positive, but we still have a long way to go to make up for past loses as shown below.

Since the beginning of this decade (2010), 9,317,000 entered the US workforce while 8,188,000 voluntarily quit looking for work.  Since year 2000, three times as many people departed the US labor force than entered it, with 8,226,000 entering as opposed to 23,465,000 departing.  Until the US achieves some level of parity between those entering and those leaving the labor force, the US economy will continue to be lack luster.

Today, out of a total population of 319 million Americans, the US has 109 million working in the private sector,  32 million government workers, 19 million unemployed, 92 million able-bodied people who can work but are not looking, and 69 million (mainly children, retired and disabled) who cannot work.   The US economy cannot be sustained by 34% supporting an overhead of 66%.   More people must be productively engaged in the private sector labor force for the US economy to flourish.

For six decades, the US produced tens of millions new jobs per decade.   Then the bottom fell out in the decade of the ‘00s with a loss of 1.2 million jobs.  It is critical that significant numbers of jobs are created this decade (’10s) for the US economy to recover.  20 million new jobs by year 2020 is a reasonable goal that is supported by the Jobenomics National Grassroots Movement.  Not only has 20 million been historically achieved, but is the number needed to accommodate 16 million new labor force entrants per decade and to reduce unemployment in order to achieve the so-called “full employment” rate of 5%.  Based on this Jobenomics goal, the US should have produced 13.75 million jobs by 1 August 2014.  We have only produced 9.32 million—a 32% shortfall.

Jobenomics measures economic progress from the start of decade (1 January 2010), which is roughly a year after the Great Recession.  From the beginning of this decade, the US private sector created 9,877,000 jobs and the public sector lost 560,000 jobs for a net gain of 9,317,000 jobs.  Today, service-providing industries employ 70.48% of all Americans, the goods-producing industries employ 13.75% and government (federal, state and local) employs 15.77%.   82.7 of all new jobs this decade were produced by four service-providing industries: professional and business services; trade, transportation, utilities; education and health services; and leisure and hospitality.

Small, emerging and self-employed business creation is essential for jobs creation and a healthy economic future.   Small business employs 77.4% of all Americans and has produced 71.4% of all new jobs this decade.  Last month, small businesses created 80.9% of all new jobs, which is remarkable due to adverse lending and regulatory environments.

US Employment.   Today, 139 million Americans are employed in government and the private sector.

Approximately 71% work in seven private sector service-providing industries.  The seven service industries are: Professional and Business services, Education and Health services, Financial Activities, Trade/Transport/Utilities, Leisure and Hospitality, Financial Activities, Information, and Other services.   Approximately 14% are employed in private sector goods-producing industries that include Manufacturing, Construction and Mining/Logging that includes oil and gas extraction.  Approximately 16% Americans work for government at the federal, state and local levels.

While the US has enjoyed some employment growth since the beginning of this decade, America is only producing 68% (32% shortfall) as many jobs as needed.  The US produced only 9,317,000 jobs compared to the 13,750,000 jobs needed as measured against the traditional benchmark of 250,000 jobs per month (250,000 x 55months = 13.75 million).   Of the three employment sectors reported by the Bureau of Labor Statistics, the private sector’s service-providing industries created 8,554,000 jobs, the private sector’s goods-producing industries created 1,323,000 jobs, and the government sector lost 560,000 jobs—with 64.1% (359,000) of all government jobs lost at the local level.

The 30-year trend in US employment has overwhelmingly been in the service-providing industries with a 30-year growth rate of 83%.  Government has also grown significantly at a rate of 37%.  However, as discussed in this posting, government employment has decreased in the last several years and is likely to continue to do so.  US goods-producing industries have declined 17% during the last thirty years.

82.7% of all net new jobs this decade were produced by four industries (Professional and Business Services, Trade/Transportation/Utilities, Education and Health Services, and Leisure and Hospitality) in the service-providing sector.  Manufacturing only contributed 6.9% to US employment growth.  Construction contributed 3.9%.  The non-internet information industries (such as publishing and news print) and government lost jobs this decade.

According to the most recent BLS Job Openings and Labor Survey[2], there were 4.7 million job openings. This survey includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region.   As shown above, the four occupations that had the largest number of openings are: Professional & Business Services (898,000), Healthcare (746,000), Accommodation & Food Services (660,000), and Retail & Wholesale Trade (624,000). The primary reason for the large number of job openings is due to the lack of job skills.

Private Sector Businesses by Company Size.  The following charts examine private sector businesses by size.  As reported by the ADP National Employment Report (published monthly by the ADP Research Institute in close collaboration with Moody’s Analytics), data indicates that small business is the dominant economic force in terms of employment and job creation.

Today, small businesses (those companies with less than 500 employees as defined by the US Small Business Association) employ 77.4% of all private sector Americans with a total of 90,547,000 million employees—almost 5 times the amount of large corporations (1000+).  Very small businesses with less than 19 employees employ 65% more than all large corporations combined (30.5M versus 18.5M).

Since the beginning of this decade, small business produced 71.4% of all new American jobs.  This is an amazing statistic considering the adverse lending environment by financial institutions, mounting government regulation, and the pittance of federal government spending on small business creation.

Very small and startup businesses have traditionally been the primary source of employment for entry-level workers and the long-term unemployed.  Had the US government paid more attention to this category of employers during its generous handouts of $17 trillion worth of federal government stimuli, bailouts and buyouts since the Great Recession, as many as five million more Americans would be employed today as estimated by Jobenomics.

According the US Small Business Association[3], startups, minus closures, create about 67% of American net new jobs.  Also according the SBA, about half of all new small businesses survive five years or more, and about one-third of these start-ups survive 10 years or more.

It is a common misperception that small businesses, especially very small (1-19 employees), are the most fragile.  The chart (above) indicates that very small businesses have been the most resilient of the five business categories following the Great Recession of 2008.  This fact cannot be understated in an environment where small businesses have been starved for investment capital unlike large businesses.  Fortunately, large business (1000+) now employ more people (see red line on the above chart) than prior to the Great Recession.

It is also a common misperception that small businesses are only involved service-providing industries whereas large major corporations dominate goods-producing industries.  The above chart indicates that small businesses play a major role in both goods-producing (manufacturing, construction, and mining) as well as the service-providing industries.

Thomson Reuters/PayNet Indices provide valuable insight into the health of small business.  The Thomson Reuters/PayNet Small Business Lending Index (SBLI)[4] measures the volume of new commercial loans and leases to small businesses.  To create the SBLI, PayNet tracks the new borrowing activity by millions of US businesses as reported by the largest lenders.  The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI)[5] measures small business financial stress and provides early warning of future insolvency.  The most recent SBLI and SBDI are shown.

The SBLI (lending) indicates that new loan originations to small businesses have increased slowly since the end of the recession and may now be at the point of significant small business expansion.  The SBDI (delinquencies) shows that loan delinquencies (31 to 90 days past due) are at their lowest point since 2005.  This is very good news for future economic growth.  Small business creditworthiness is critical to business expansion and jobs creation.

Jobenomics asserts that the solution to growing America’s economy involves putting our small business economic engine into over-drive.  Energizing existing small businesses and creating new small and self-employed businesses could create millions of new jobs within a decade.  To prove the validity of this assertion, Jobenomics is working with a number of US cities to implement Jobenomics Community-Based Business Generators to create thousands of new-start businesses.  The objective of a Jobenomics Business Generator is to increase “birth rates” of start-up businesses, extend the “life span” of small businesses, and increase the number of employees per business, which has decreased by approximately 30% since the Great Recession.  Jobenomics is focused on four demographics with high growth potential:  Generation Y-, Women-, Minority-, and Veteran-Owned Businesses.

If Jobenomics can help create thousands of highly-scalable small businesses, America writ-large can facilitate creation of millions of small businesses that would transform our economy.  2014 could be a break-out year for small businesses that traditionally have been the primary source of employment for entry-level workers and the long-term unemployed.

Service-Providing Sector.  The US service-providing sector has grown 83% over the last three decades.

Since year 2010, the US service-providing sector averaged 83% growth with 8,554,000 new jobs created.  Today, the US service-providing sector employs a total of 97,965,000 people across seven industries.

Employment statistics for industries in the service-providing sector are ranked by the number of new jobs created between 1 January 2010 and 1 August 2014 (55 months):

  • Professional and Business Services: 2,794,000 new jobs
  • Trade, Transportation, Utilities: 1,965,000 new jobs
  • Education and Health Services: 1,771,000 new jobs
  • Leisure and Hospitality: 1,703,000 new jobs
  • Financial Activities:  208,000 new jobs
  • Other Services: 191,000 new jobs
  • Information (non-internet, like publishing): -78,000 jobs lost

Of the seven service-providing industries, only the Information (non-internet companies like broadcasting and publishing, such as newspapers) industry lost jobs (-2.8%) during the post-Great Recession recovery period starting in January 2010.  The top three industries are Professional and Business Services (17.0%), Leisure and Hospitality (13.2%) and Education and Health Services (9.0%).

Goods-Producing Sector.  The US goods-producing sector includes Manufacturing, Construction and Mining/Logging industries and has declined 23% since its peak in March 2000.

US goods-producing sector has grown by 1,332,000 workers since its post-recession low in February 2010, but has a long way to go to reach peak employment.   Today, the goods-producing sector employs a total of 19,117,000 people across the three industries shown below.

Employment statistics for industries in this sector are ranked by the number of jobs created between 1 January 2010 and 1 August 2014 (55 months):

  • Manufacturing:  683,000 new jobs
  • Construction: 387,000 new jobs
  • Mining and Logging: 253,000 new jobs

The fastest growing industry in the goods-producing sector is Mining/Logging (38.2%), followed by Construction (6.8%) and Manufacturing (6.0%).  The explosive growth in the Mining/Logging industry is largely due to oil and natural gas extraction, and related exploration and support activities.

US Manufacturing Assessment.  While manufacturing has added 683,000 new jobs since the beginning of this decade, it has a long way to go to achieve peak its peak level of 19.6 million in June 1979 after sustaining a consistent growth rate from its post-World War II low of 12.5 million in September 1945.   Since its peak in 1979, the US manufacturing industry has declined by 38%.

While the addition of almost 700,000 new jobs from manufacturing’s all time low of 11.5 million in January 2010 is positive, the manufacturing sector is still in the doldrums from a historical perspective.

Within the last 12 months, manufacturing has had 12 up-months and no down-months in terms of employment with a net increase of only 178,000 jobs in the last year (out of a total of approximately 2.6 million new jobs across all industries).

Notwithstanding  the political rhetoric  about increasing US exports, re-shoring of US manufacturing jobs and increased US productivity, Jobenomics forecasts limited upside jobs potential in manufacturing due to excessive government regulation, improved automation, competitive foreign labor rates, and a lack of high-tech manufacturing skills in our civilian labor force (see Jobenomics’ Manufacturing Industry Forecast posting).  The advent of new technologies (like 3D printing of manufactured parts and advanced robotics) reduce the need for non-skilled labor as well as automating many higher level positions in marketing, accounting, machinists and administration.  As of the most recent BLS Job Openings and Labor Survey, US manufacturers have 301,000 open high-tech jobs that currently are unfilled out of a total of 4.7 million unfilled jobs.  Jobenomics is also concerned by the amount political and public  emphasis on the manufacturing growth as the primary engine for jobs creation.  While manufacturing is vitally important to our nation, political emphasis needs to be on the high growth industries in the service sector.  Manufacturing emphasis should be on protecting our gains and focusing on next-generation manufacturing technology, processes and recapitalization.

US Construction Industry Assessment.  Even though the construction industry is showing signs of growth, the construction sector continues to struggle after a rapid rise (69%) during the go-go years in the 1990s and the housing bubble in the early 2000s.

In the 2006-07 time period, peak construction employment was 7.73M.  Today, it is 6.04M, a loss of -22%.  The good news is that construction employment stopped its decline and has increased for its post-recession low of 5.44M in January 2011.

Residential construction employment was hardest hit segment with a 43% decrease from its pre-recession peak (3.45 million) to its post-recession low (1.98 million).  Today, residential construction employment is still down from its peak by 34% with a total employment of 2.29 million.   Nonresidential construction fared slightly better with losses of  -24% from peak and -18% today with 2.84 million employed.  The heavy and civil engineering sector fared the best (largely due to federal stimulus programs) loosing -19% from peak and now down only -9% with a total of 919,000 employed.

Within the last 12 months, construction has had 12 up-months and no down-months in terms of employment with a net increase of 211,000 jobs in the last year.

As of the most recent BLS Job Openings and Labor Survey, US construction companies have 146,000 open jobs (mainly higher skilled jobs) that currently are unfilled out of a total of 4.7 million unfilled US jobs.  While these number are positive overall, the bulk of job hires occurred last year or early in 2013.  The construction industry had a downturn occurred during peak summer construction months.  In addition, increasing mortgage rates coupled with an eroding middle-class will hamper new home construction starts for the future.

Robust residential construction usually leads economic recoveries.  However, this recovery is different.  As shown above, according to US Census Bureau Data, new residential starts dropped from a peak 2,273,000 in 2006 to a low 478,000 in April 2009.  As of the latest US Census Bureau data available[6], new residential construction starts was 893,000 in June 2014, which represents an improvement from a 80% decrease to a 61% decrease from the January 2006 peak.

The Census Bureau also reports[7] that US homeowership has dropped to its lowest level since 1977 and down -6.2% from its high in 2004.   This drop is due to less affordable housing, more restrictive lending, fewer first-time buyers who are renting rather than buying, and people who have dropped out of the housing market.

Jobenomics forecasts that the residential construction industry will not produce a significant number of jobs for the remainder of this decade due to foreclosures, underwater mortgages, unemployment as well as changing attitudes to the value of homeownership.  Due to the stagnant economy and government deficits, commercial and heavy construction is also unlikely to produce a significant number of new domestic jobs.  Jobenomics does see potential in major foreign construction projects, green construction and renovation of older homes, and reconstruction of disaster areas.

US Mining/Logging Industry Assessment.  Mining (oil & gas extraction, coal and minerals) and logging goods-producing sector continues to be a bright area for employment growth.  From the beginning of this decade, mining increased employment by 253,000 jobs, with an impressive growth rate of 38.2%.  With proper private and public sector support, this industry has significant upside potential.

Mining exploration and support employment has more than doubled in the last decade and likely to double again with exploration for domestic energy sources.  Oil and gas extraction is also likely to double with new natural gas, oil shale, oil sands and offshore oil resources are exploited via new  technology, like horizontal drilling and hydraulic fracking.  Minerals mining employment has been stagnant over the decade, but this may change as commodity prices (gold, silver, copper) increase as well as worldwide demand for these commodities increase.  Coal mining and logging are not likely to increase anytime soon mainly due to environmental pressure and the emphasis on clean renewable technology.

The Government Employment Sector.  Total government sector employment currently is 21,922,000.  Since 1 January 2010, government has lost 560,000 jobs, a negative 2.5% growth rate.  Employment statistics in this sector is shown in the following chart.

The government sector continued to lose jobs with 64.1% of all job losses occurring with local government (mainly teachers, police and firefighters), 15.0% at the state level, and 20.9% in the federal government (not including military, which is also downsizing).  Jobenomics predicts that government job losses will continue to decline due the effects of sequestration as well as debt and deficit spending.  In addition, if the US economy suffers an economic disruption due to either domestic or foreign events, government spending will likely decrease further.

In conclusion, business and jobs creation is the number one issue facing US economic recovery.  While some would argue that debt/deficits or entitlement/welfare are the biggest issues, it takes businesses to create lasting jobs that generate tax revenue to run government as well as supporting the less fortunate.   The following chart is about as simple as Jobenomics can make it.

Today, out of a total population of 319 million Americans, the US has 109 million taxpayers (34%) working in the private sector who support: 32 million government workers (including 10 million government contractors), 19 million unemployed or underemployed (BLS U6 rate) workers who are looking for work, 92 million able-bodied people (Not-in-Labor-Force category) who can work but are not looking, and 69 million (mainly children, retired and disabled) who cannot work.   The US economy cannot be sustained by 34% supporting an overhead of 66% via a combination of welfare, entitlement, familial and charitable programs.   More people must be productively engaged in the private sector labor force for the US economy to flourish.

The solution to growing America’s economic base involves engaging our small business economic engine.  Even though severely constrained by limited financing and restrictive government policies, small businesses created over 71% of all new jobs in the US since the end of Great Recession.  Jobenomics believes that new small, emerging and self-employed businesses could create 20 million new jobs within a decade, if properly incentivized and supported.  Consequently, Jobenomics is focused on four demographics with high growth potential that include Generation Y (via monetizing social networks), Women-Owned Businesses (via direct care business creation), Inner-Cities (via urban mining and related service businesses) and Veteran-Owned Businesses.  If Jobenomics can help create thousands of highly-scalable small businesses, America writ-large can facilitate the creation of millions of small businesses that would transform our economy.


[1] US Bureau of Labor Statistics, Employment Situation Summary,

[2] BLS, Job Openings and Labor Survey (November 2013),

[3] US Small Business Association, Office of Advocacy, Which businesses create more jobs—startups or existing businesses?,

[4] Thomson Reuters/PayNet Small Business Lending Index, retrieved 6 August 2014,

[5] Thomson Reuters/PayNet Small Business Delinquency Index, retrieved 6 August 2014,

[6] US Census Bureau, Business and Industry, Time Series/Trend Charts, New Residential Construction, Annual Rate for Housing Units Started,

[7] US Census Bureau, Table 14. Homeownership Rates for the US and Regions:  1965 to Present, Retrieved 7 August 2014,

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