Goal: Creating 20 Million Jobs By 2020

Jobenomics - Goal: Creating 20 Million Jobs By 2020

Jobenomics Employment Report: February 2014

Jobenomics Employment Report: February 2014

By: Chuck Vollmer

18 February 2014

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

Executive Summary.   According to the February 2014 Bureau of Labor Statistics (BLS) Employment Situation Summary[1], over the last month total nonfarm payroll employment rose by 113,000 people, which is less than half the number needed for a sustained economic recovery.  Also according to the BLS, 196,000 people departed the US labor force for a net loss of 83,000.  Since year 2000, almost 4 times as many people departed the US labor force than entered it, with 6,721,000 people entering the US labor force as opposed to 23,643,000 who departed.   This trend much be reversed for the US economy to recover and stop the erosion of the US middle-class.  If these rates continue, Jobenomics calculates that those who choose not to work will outnumber those who work by year 2020.

For six decades, the US consistently 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.  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 4 million unemployed in order to achieve the so-called “full employment” rate of 5%.  Based on this goal, the US should have produced 12.25 million jobs by 1 February 2014.  We have only produced 8.13 million—a 34% shortfall.

The US private sector created 8,793,000 jobs this decade, and the public sector lost 667,000 jobs.  Today, service-providing industries employ 70.4% of all Americans, the goods-producing industries employ 13.7% and government (federal, state and local) employs 15.9%.

84.7% 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.  As discussed herein, the much touted goods-producing manufacturing and construction industries are not likely to create a significant amount of jobs in the foreseeable future.

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 70.5% of all new jobs this decade.  Unfortunately, the vast majority of government stimulus funds have been directed at financial institutions and large corporations with little for small business—the US economic engine.

US Employment.   Today, 137,499,000 Americans are employed in government and the private sector.  96,799,000 (70.4%) 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.   18,887,000 (13.7%) are in private sector goods-producing industries that include Manufacturing, Construction and Mining/Logging that includes oil and gas extraction.  21,813,000 (15.9%) Americans work for government at the federal, state and local levels.  Since government employment is services-related, a total of 86.3% of all Americans work in service-related industries.

 The 30-year trend in US employment has overwhelmingly been in the service-providing industries with a 30-year growth rate of 81%.  Government has also grown significantly at a rate of 36%.  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.

While the US has enjoyed some employment growth since the beginning of this decade, America is only producing 66% (34% shortfall) as many jobs as needed.  The US produced only 8,126,000 jobs compared to the 12,250,000 jobs needed as measured against the traditional benchmark of 250,000 jobs per month (250,000 x 49 months = 12.25 million).   Of the three employment sectors reported by the Bureau of Labor Statistics, the private sector’s service-providing industries created 7,692,000 jobs, the private sector’s goods-producing industries created 1,101,000 jobs, and the government sector lost 667,000 jobs—with 69.9% (466,000) of all government jobs lost at the local level.

84.7% of all 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 7.0% to US employment growth.   Construction contributed approximately 2%.  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 3.6 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 (632,000), Healthcare (550,000), Retail & Wholesale Trade (474,000), and Accommodation & Food Services (406,000).  The primary reason for the large number of job openings is due to the lack of job skills and the effects of computerization.  Regarding computerization, according to a recent Oxford University study[3], 47% of current US employment is potentially automatable within the next two decades.

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 89.0 million employees—5 times the amount of large corporations (1000+).  Very small businesses with less than 19 employees employ 64% more than all large corporations combined (29.8M versus 18.1M).

Since the beginning of this decade, small business produced 70.5% 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 $16.6 trillion (see: Stock Markets and The Fed posting) 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[4], startups, minus closures, create about 67% of American net new jobs.  Also according the SBA, about half of all new 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.

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)[5] 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)[6] 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, which is very good news for 2014.  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 81% over the last three decades.

Since year 2010, the US service-providing sector averaged 8% growth with 7,388,000 new jobs created.  Today, the US service-providing sector employs a total of 96,799,000 people across the seven industries.

Employment statistics for industries in the service-providing sector are ranked by the number of jobs created between 1 January 2010 and 1 February 2014 (49 months):

  • Professional and Business Services: 2,391,000 new jobs
  • Trade, Transportation, Utilities: 1,709,000 new jobs
  • Leisure and Hospitality: 1,517,000 new jobs
  • Education and Health Services: 1,515,000 new jobs
  • Other Services: 164,000 new jobs
  • Financial Activities:  157,000 new jobs
  • Information (non-internet, like publishing): -65,000 jobs lost

Of the seven service-providing industries, only the Information (non-internet companies like broadcasting and publishing, such as newspapers) industry lost jobs (-2.4%) during the post-Great Recession recovery period starting in January 2010.  The top three industries are Professional and Business Services (14.5%), Leisure and Hospitality (11.7%) and Education and Health Services (7.7%).

Goods-producing sector.  The US goods-producing sector includes Manufacturing, Construction and Mining/Logging industries and has declined 22% since its peak in March 2000.

US goods-producing sector has grown by 1,093,000 since its post-recession low in February 2010, but has a long way to go to reach peak employment.   Today, the US service-providing sector employs a total of 18,887,000 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 February 2014 (49 months):

  • Manufacturing:  598,000 new jobs
  • Mining and Logging: 227,000 new jobs
  • Construction: 268,000 new jobs

The fastest growing industry in the goods-producing sector is Mining/Logging (34.2%), followed by Manufacturing (4.7%) and Construction (5.2%).  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 about  ½ million 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 39%.

Today, US manufacturing employs 12,075,000.  While the addition of 557,000 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.

Within the last 12 months, manufacturing has had 7 up-months and  5 down-months in terms of employment with a disappointing net increase of only 93,000 jobs in the last year.

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 270,000 open high-tech jobs that currently are unfilled.  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 5.92M, a loss of -24%.  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 M million).  Today, residential construction employment is still down from its peak by 35% with a total employment of 2.23 million.   Nonresidential construction fared slightly better with losses of  -24% from peak and -19% today with 2.80 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 -12% with a total of 887,000 employed.

Within the last 12 months, construction has had 9 up-months and 3 down-months in terms of employment with a net increase of 187,000 jobs in the last year.  As of the most recent BLS Job Openings and Labor Survey, US construction companies have 115,000 open jobs (mainly higher skilled jobs) that currently are unfilled.  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 foreseeable future.

Construction usually leads economic recoveries.  However, this recovery is different.  As shown above, according to US Census Bureau Data[7], new residential starts dropped from a peak 2.068 million in 2005 to a low 554,000 in 2009.  In 2014, new residential construction starts was 923,000, an increase of 40% from the 2009 low but still 55% below the 2005 high.

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 homeowners.  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 like the Northeast after Hurricane Sandy that is getting a $65 billion infusion of cash form the federal government.  However, these bright spots will not make up for stagnancy in US GDP and US employment.

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 227,000 jobs, with an impressive growth rate of 34.2%.  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 21,813,000.  Since 1 January 2010, government has lost 667,000 jobs, a negative 3.0% growth rate.

Employment statistics in this sector is shown in the following chart and are ranked by the number of jobs lost between 1 January 2010 and 1 February 2014.

The government sector continued to lose jobs with 69.9% of all job losses occurring with local government (mainly teachers, police and firefighters), 14.7% at the state level, and 15.4% 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 two charts are about as simple as Jobenomics can make it.

 According to the February 2014 Bureau of Labor Statistics (BLS) Employment Situation Summary[8], total nonfarm payroll employment rose by 113,000, compared to 196,000 who people departed the US labor force for a net loss of 83,000 as shown above.  Since year 2000, almost 4 times as many people departed the US labor force than entered it, with 6,721,000 people entering the US labor force as opposed to 23,643,000 who departed.  These numbers do not include the 20 million people that are unemployed.

Today, out of a total population of 317.5 million Americans, the US has 105.5 million taxpayers (33%) working in the private sector who support: 32 million government workers (including 10 million government contractors), 20 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 68 million (mainly children, retired and disabled) who cannot work.   The US economy cannot be sustained by 33% supporting an overhead of 67% via a combination of welfare, entitlement, familial and charitable programs.

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 70% 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] Oxford University, The Future of Employment: How Susceptible Are Jobs To Computerisation?, Page 37,  17 September 2013,

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

[5] Thomson Reuters/PayNet Small Business Lending Index, retrieved 23 Dec 2013,

[6] Thomson Reuters/PayNet Small Business Delinquency Index, retrieved 23 Dec 2013,

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

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

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