December 1, 2006

 

Employment bandwagon (Nov'06)

 

(c) copyright, View from Silicon Valley, 2006.  All rights reserved.

 

 

 

There was another round of headlines over the last week claiming job growth in Silicon Valley was strong.  The proclamation was this "proves" we are "recovered" from the dot-com bust.  (The implication was this allegedly-strong job growth would lead to continued strong housing prices.)

 

We wrote up this nonsense using April 1996, 2001, 2005 and 2006 jobs numbers at:

 http://www.viewfromsiliconvalley.com/id228.html

 

Then again for September 1996, 2001, 2005 and 2006 jobs numbers at:

http://www.viewfromsiliconvalley.com/id274.html

 

Today, let's compare October, 1996, 2001, 2006 and 2006 job numbers.  These are the figures from California's own database:

 

                         Oct'96   Oct'01   Oct'05   Oct'06

Total Jobs                897.3    969.1    865.0    890.9

Nonfarm Jobs              890.7    963.8    860.8    883.3

Construction               34.8     47.0     44.5     46.7

Manufacturing             244.8    230.5    168.6    171.3

Semiconductor Mfg.         71.0     66.6     50.8     51.6

Trade, Transport & Utils  137.8    140.8    131.3    134.6

Information                26.7     38.2     34.9     36.1

Financial Activities       31.5     35.5     36.2     36.7

Prof & Bus Services       160.1    187.0    158.2    161.4

Real Estate*               13.8     15.5     14.9     15.7

Education & Health Svcs    78.7     91.6     96.6     98.6

Leisure & Hospitality      60.8     69.2     71.8     75.4

Government                 89.1     97.6     93.7     97.0

 

Just for fun:

Federal Government         13.5     11.6     11.1     11.1

State/Local Gov't          75.6     78.0     82.6     85.9

Ratio                       5.6x     6.7x     7.4x     7.7x

 

Why is our local government employment growing faster the federal government employment?  Since federal amployment only varied 4% in the last five years, the local goverment payroll is clearly the culprit.

 

Adding private sector jobs (tracked by the state but not reported locally):

Total Private             801.6    866.2    767.1    786.3

Private % total            89.5%    89.4%    88.4%    88.5%

 

Which seems to over-state private-sector jobs since:

Governmet % total:          9.9%    10.1%    10.8%    10.9%

 

Of course, our preferred measure  of the health of the local job market is the percentage of jobs in construction, health, leisure and hospitality, real estate, government plus education. 

 

"Charge" Jobs             277.2    320.9    321.5    333.4

                           29.8%    31.0%    35.2%    35.3%

 

Anybody see a trend in these numbers? 

 

For the record, 46% of jobs gained since October, 2005 were CHARGE jobs.  Since these jobs represent only 35% of total jobs, CHARGE jobs are gaining market share.

 

Just like mainstream media, we reserve the right to invent new statistics when it suits our purpose.  In this case, our newly-invented statistic will be "decade-over-decade" (or d-o-d) growth.  (Maybe we should file for a patent? ;=)

 

Running the same table for d-o-d we get:

 

                         Sep'06    d-o-d   d-o-d%

Total Jobs                890.9    -6.4K    -0.7% (=-0.0071)

Nonfarm Jobs              883.3    -7.4K    -0.8%

Construction               46.7   +11.9K   +34.2%

Manufacturing             171.3   -73.5K   -30.0%

Semiconductor Mfg.         51.6   -19.4K   -27.2%

Trade, Transport & Utils  134.6    -3.2K    -2.3%

Information                36.1    +9.4K   +35.2%

Financial Activities       36.7    +5.2K   +16.5%

Prof & Bus Services       161.4    +1.3K    +0.8%

Real Estate                15.7    +1.9K   +13.8%

Education & Health Svcs    98.6   +19.9K   +25.3%

Leisure & Hospitality      75.4   +14.6K   +24.0%

Government                 97.0    +7.9K    +8.9%

Once more people understand we are +56.2K CHARGE jobs d-o-d (or +20.3%), fewer of us will pay any attention to monthly headlines proclaiming Silicon Valley is "back."  Yes, there are a few more jobs out there.  No, there is not a widespread resumption of the mid-90's prosperity, let alone the bubble years.

 

Extracting out the jobs whose goal is to earn a profit, building houses or paying minimum wage, the actual growth over the last 10 years is negative.

 

 

Conclusion:

CHARGE jobs are gaining market share.

 

Check the actual numbers before jumping on any bandwagons cheering the recovery of employment in Silicon Valley.