The employment recession was deep and the recovery generally weak. How accurate is this statement when looking at financial industry employment compared to other industries? Here’s what the data looks like for total U.S. employment growth from 1990 to 2013 and from 2010 to 2013 – none of the figures are likely surprising.
The industry with the largest increase in employment from 1990 to 2013 is Professional and Business Services at 76 percent. This is followed by Education and Health Services at 74 percent, Leisure and Hospitality at 51 percent, Natural Resources 21 percent, Government at 18 percent, Financial Activities at 17 percent, Trade, Transportation, and Utilities at 17 percent, and Information at less than 1 percent.
The order of industries in this employment growth arena doesn’t change much when switching from 1990 to 2013 to 2010 to 2013. In total, Professional and Business Services continues to show up on top at 9 percent, followed by Leisure and Hospitality at 8 percent, Natural Resources at 6 percent, Education and Health Services at 5 percent, Trade, Transportation, and Utilities at 4 percent, and Financial Activities at 3 percent. Two of the eight major industries are still down from 2010, with Information down 1 percent and Government down 2 percent.
So, to answer the broad initial question: the financial industry is doing moderately well since the bottoming of the recession, with employment recovering not as quickly as other industries but doing better than information technology and government.
What’s causing slower growth in the financial industry? Opinions differ, but all industry professionals and outside observers generally agree that regulatory burdens are causing downward pressure, with Basel III and Dodd-Frank being chief culprits.
With the broad background in mind, one might ask: how is the financial industry doing compared to other industries by U.S. state? Here are the maps for the eight major industries discussed so far.
Interestingly, the mountain west is doing quite well in the Financial Activities sector, with Idaho up 8 percent, Utah up 7 percent, and Arizona up 9 percent. Over this same time frame, the northeast is not doing quite as well, with financial industry employment in 2013 still below what is was in 2010 in such states as Massachusetts, Pennsylvania, New Jersey, Connecticut, and West Virginia. The remainder of the maps are presented for informational purposes to compare the financial industry against the other seven major industries. Take a look, there’s some interesting stuff in the details.
Overall, employment within the financial industry is recovering moderately well, with growth of 3 percent since 2010. The financial industry is not growing as quickly as some other industries due perhaps to regulations, with Dodd-Frank and Basel III being two of the main drivers behind slower than usual employment growth.
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