Economy
A decade since the Great Recession: GDP and job growth across industries and states
The pandemic created shifts in employment. However, the overall economy has been shifting away from goods and production-oriented sectors like manufacturing to service-oriented sectors like health care, professional services, and education for years. There are three top variables to track when plotting the changing economic landscape: the number of jobs in that industry, the median annual wages of those jobs, and the dollar contribution of the industry to the overall national income or gross domestic product (GDP).
The health care industry has grown by 5.7 million jobs from 2004.
In 2004, the retail trade sector employed more people than any other industry, providing 15.2 million jobs. Health care and manufacturing followed with 14.9 million and 14.3 million jobs, respectively. These three industries accounted for 35% of all 2004 employment.
More jobs don’t necessarily translate to a larger GDP contribution. The value an industry adds to GDP is the sum of employee compensation, profit, and taxes on production and imports minus subsidies. The government, manufacturing, and real estate sectors all contributed $2 trillion or more to GDP in 2004, after adjusting for inflation. Government led with $2.16 trillion in 2020 dollars.
The same three sectors led contributions to GDP in 2020. Real estate topped the list at $2.93 trillion.
Despite the Great Recession and the COVID-19 pandemic, growth in the economy and population fueled job growth from 2004 to 2020. Health care grew the most, adding 5.7 million jobs and accounted for 20.6 million of the 139 million jobs in 2020. The professional services industry, which includes lawyers, consultants, and engineers, added the next most jobs, increasing employment by 2.7 million since 2004. The top three sectors in 2020 — health care, retail trade, and education — employed 48 million people, or 35% of all employment.
Not all industries expanded as the economy grew. Manufacturing sector employment has decreased by 2.2 million since 2004, a 15% drop. Employment in the information sector decreased by 376,000 jobs, or 12%. Much of the decline in the information sector was driven by a decrease in telecommunications employment from its early 2000’s peak as the industry restructured to focus on wireless communications.
As employment in health care has grown, employment in manufacturing has declined.
Wage growth has been uneven across industries. Annual median wages for agriculture workers increased the most since 2004 (27%), but industry wages were still $30,020 in 2020, below the national average. At the same time, wages for those in the information sector and at holding companies, or companies that manage other companies, are over $70,000 and have increased 24% and 25%, respectively. Transportation sector wages have failed to grow in inflation-adjusted terms, decreasing 10% from 2004. Accommodation and food sector workers were paid the least last year: $25,350. Due to pandemic restrictions, they were the second most likely to lose their job from 2019 to 2020.
For more on how the economy has changed during the pandemic, visit the State of the Union in Numbers and get the facts every week by signing up for our newsletter.
