We’ve expounded before on the transformation of employment in the U.S. in our June 3, 2019 blog and today’s figures continue the trend in movement towards more lower-paid service-providing jobs and away from manufacturing/goods producing.  Two observations we would like to comment on today.   First, in the municipal market, “new money” borrowing has grown steadily since 2015. We looked at one of the infrastructure categories of work:  “heavy and civil engineering construction” and there’s an observable pattern of higher employment following increased borrowing for construction in this category. While correlation is not causation, we note that business cap-ex spending, which has been on the light side,  is not likely the key contributor here.   Imagine what a large-scale federal program would do for higher paid construction and engineering employment and benefits to improving the economy! We have to think that the infrastructure upgrades highlighted here have made at least some contribution to economic growth.

Second, we observe a continued effect (“Amazonification”???) on growth in the courier and messenger work category as well as in warehousing and storage.  While some attribute the growth in messenger services in December/January to the holiday season, this category has been growing steadily, even in down months — we randomly picked October and February in our second table below.  (Valentine’s Day flower and gift delivery is not a new phenomenon, so we shouldn’t see a major jump YOY for that reason.) 

Infrastructure borrowing increased $5 billion between 2014-2015 after a lull but jumped $23 billion in 2016, $29 billion in 2017, $33 in 2018 and $27 in 2019.   In 2016, there were five months with elevated volume relative to prior years.  At the end of 2017, ahead of implementation of tax reform there was heavy borrowing.  There is typically a time lag to let contracts and the typical municipal construction season is stronger in the summer months since school is out and the weather is construction-friendly in much of the country. So, we are not surprised to see the jump in civil engineering construction during these months in 2017 and 2018.  Borrowing was heavy towards the end of 2019 so we hope to see a busy state and local construction season this 2020 spring and summer.  (Note: these tables show increases, not absolute employment, which is about one million in the civil engineering category).

There are now about a million couriers and messengers compared with a little more than half that number a decade ago.  If you live in a dense city, you likely see delivery people crisscrossing the streets.  Not sure where the USPS and UPS drivers that bring you your Amazon and other company parcels are counted.  Highlighted below in blue are the heavy jumps in YOY employment for the year.  This is more than just holiday growth.  You can see the significant jump in October 2019 and also in December 2019.  Keep in mind the other trend for people to give gift cards that don’t get spent until January…or maybe February too.  Last year was a stellar year for Amazon growth according to the company.    It looks like delivery employment is up in January 2020 as well.

Warehousing and Storage employment has continued to grow too, as you can see from the following table.  We highlighted months that added more than 80,000 jobs above the same month the prior year.  Needless to say, messenger and warehouse jobs are not as highly paid as manufacturing, which is declining, hence some of the reason for slow wage growth despite job growth.