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March 1999, Vol. 122, No. 3

Labor month in review

The March Review
Most textile workers in Southeast region
Sources of shifts in productivity growth
Transportation spending slows

The March Review

The most recent economic recession ended in March 1991, thus this issue of Monthly Labor Review marks the end of the eighth year of recovery and expansion. Cynthia Engel provides an example of what our colleagues in the financial press would call "sector rotation" in such a prolonged uptrend. The health care sector had been a growing portion of the private economy until the latter half of the 1990s. Since then, despite the fact that health services remains in that small group of industries that consistently add tens of thousands of jobs to their payrolls almost every month, its rate of growth has fallen below that of other industries. Leadership in employment growth has rotated to industries such as computer and data processing and engineering and management services.

One sign of an economic expansion’s prolongation is increasingly serious analysis of the concept of labor shortage. Carolyn M. Veneri reviews the use of labor market statistics, anecdotal evidence, and specific knowledge of the supply and demand factors for particular occupations to make a fuller assessment of labor shortages than would be possible relying on only one source. She also notes that the statistical basis for such analyses would be strengthened by the inclusion of job vacancy data such as BLS is currently working to begin collecting again.

Bruce C. Fallick correlates industry growth with the share of industry employment that is part time. He concludes that there is a positive association between the two for a period between the early 1980s and the early 1990s. However, because the association did not become clear until that era and both the relative growth rates and part-time intensities of industries have changed so much in the modern economy, he cautions against assuming that "fast-growing industries will continue to use part-time labor intensively or that part-time intensive industries will continue to grow quickly."

Michael K. Lettau and Thomas C. Buchmueller examine the suggestion that low rates of benefit coverage for part-time workers can be explained by higher per-hour costs for such quasi-fixed expenses. They find that this argument is most persuasive for health insurance benefits, but is a less powerful explanation for any differences in provision of pensions and paid leave.

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Most textile workers in Southeast region

In 1997, textile plants in the Southeast region of the United States had 438,300 employees, or more than 70 percent of the Nation’s textile workers. North Carolina dominated the industry with 29 percent of total U.S. textile employment — as much as the combined textile employment of all States outside the Southeast region. Georgia and South Carolina also had large textile employment shares.

Despite the large number of textile workers in the Southeast, the industry’s employment declined 12,400 in the region, or about 3 percent, from 1996 to 1997. Within the region, Kentucky had the largest percent decrease at 11 percent, and decreases also occurred in Georgia, South Carolina, and Tennessee. Mississippi’s textile employment increased 10 percent over the year. Nationally, employment in the textile industry fell 1.8 percent. Obtain more information from "Issues in Labor Statistics: The Southeast is Maintaining its Share of Textile Plant Employment," Summary 99–2.

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Sources of shifts in productivity growth

Labor productivity growth for the private business sector has averaged about 1.3 percent per year since 1973: 1.3 percent from 1973 to 1979, 1.2 percent from 1979 to 1990, and 1.3 percent again from 1990 to 1997. Although the average annual rates of growth in output per hour of labor input were about the same during these periods, the reasons for that growth have differed.

During the period 1973 to 1979, multifactor productivity growth — output per hour of combined labor and capital inputs — and increased capital intensity accounted for virtually all the increase in output per hour. Shifts in labor com-position—the educational attainment and work experience of the labor force — made no contribution.

From 1979 to 1990, multifactor productivity growth slowed, but the contribution of labor composition by education and experience increased enough to offset this decline. The contribution of capital intensity was not much changed.

The sources of labor productivity shifted again after 1990. The contribution of capital intensity slowed, while multifactor productivity growth edged back up. The contribution of labor composition accelerated as baby-boomers completed their entrance into prime working age. Obtain additional information from news release USDL 99–36, "Multifactor Productivity Trends, 1997."

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Transportation spending slows

After having risen by 6.1 percent the previous year, spending on transportation increased by only 1.2 percent in 1997. Consumer units spent an average of $6,457 for transportation-related expenditures during the year. Vehicle purchases are the largest transportation component and accounted for 42 percent of transportation spending in 1997. During the year, spending on vehicle purchases dropped by 2.8 percent, after rising 6.7 percent in 1996. Vehicle purchases fluctuate widely from year to year because relatively small changes in the percentage of consumer units buying expensive, infrequently purchased vehicles have a large effect on the average. Obtain additional information from "Consumer Expenditures in 1997," BLS Report 927.

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Communications regarding the Monthly Labor Review may be sent to the Editor-in-Chief at 2 Massachusetts Avenue NE, Room 2850, Washington, DC, 20212, or faxed to (202) 606–5899.

News releases discussed above are available at: http://www.bls.gov/bls/newsrels.htm

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