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April 2010, Vol. 133, No. 4
Industry shifts over the decade put Philadelphia on a new road to job growth
Gerald Perrins and Diane Nilsen
Gerald Perrins is the regional economist in the Philadelphia Office of Field Operations, Bureau of Labor Statistics; Diane Nilsen is the regional economist in the National Office, Washington, DC.
Expansion of the education and health services and professional and business services supersectors from 1998 to 2008 allowed Philadelphia and its environs to reduce the area’s dependence on perennial jobs leader trade, transportation, and utilities.
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During the 10-year period from 1998 to 2008, the industrial composition of the Philadelphia metropolitan area1 job market evolved considerably. Once a traditional metropolitan area with the largest percentage of jobs concentrated in the trade, transportation, and utilities supersector, Philadelphia has transformed itself into a leader in the education and health services industry. Moreover, professional and business services also increased its employment presence in the area over the decade, while fewer jobs became available in manufacturing.
This article looks at how the employment expansion in two supersectors in Philadelphia—education and health services, and professional and business services—helped reshape the metropolitan area’s job market from the first quarter of 1998 to the first quarter of 2008. Using employment and wage data from the Quarterly Census of Employment and Wages (QCEW) program,2 this study examines shifts in both employment and wage growth for the two industry supersectors in the 11 counties composing the greater Philadelphia area. The availability of detailed industry data at the county level allowed each jurisdiction’s3 growth to be analyzed independently, whereupon distinct patterns became readily apparent. Notably, employment in education and health services remained concentrated in Philadelphia County4 despite the large number of jobs added across the metropolitan area, with the City accounting for 37 percent of those employed in this industry in 2008, the same as 10 years earlier. In contrast, the distribution of jobs in professional and business services was appreciably affected by the increased growth in that supersector over the decade, with the result that Montgomery County had overtaken the City as the industry’s largest employer by 2008 with 25 percent of the workforce. Lastly, when appropriate, Philadelphia, 1 of the 12 largest metropolitan areas in the United States, was compared with its counterparts.
This excerpt is from an article published in the April 2010 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The substate area data presented in this article reflect the standards and definitions established by the U.S. Office of Management and Budget as of March 2004. A detailed list of the geographic definitions is available on the Internet at www.whitehouse.gov/omb/bulletins/fy2008/b08-01.pdf (visited October 19, 2008). The Philadelphia-Camden-Wilmington, PA-NJ-DE-MD, Metropolitan Statistical Area (MSA) is composed of Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania; Burlington, Camden, Gloucester, and Salem Counties in New Jersey; New Castle County in Delaware; and Cecil County in Maryland.
The Camden, NJ, Metropolitan Division is composed of Burlington, Camden, and Gloucester Counties in New Jersey. The Philadelphia, PA, Metropolitan Division is composed of Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania. The Wilmington, DE-MD-NJ, Metropolitan Division is composed of New Castle County in Delaware, Cecil County in Maryland, and Salem County in New Jersey.
The Philadelphia-Camden-Wilmington, PA-NJ-DE-MD, MSA is commonly referred to as the Delaware Valley; this designation is used as a substitute for the Philadelphia metropolitan area throughout the article.
2 The Quarterly Census of Employment and Wages (QCEW), a cooperative program involving the Bureau of Labor Statistics (BLS) and the various State Workforce Agencies (SWAs), provides employment and wage data for workers covered by State Unemployment Insurance (UI) laws that are compiled from quarterly contribution reports submitted to the SWAs by employers. For Federal civilian workers covered by the Unemployment Compensation for Federal Employees (UCFE) program, employment and wage data are compiled from quarterly reports that are sent to the appropriate swa by the specific Federal Agency. The employment and wage data used in this article are derived from microdata summaries of more than 8 million employer reports of employment and wages submitted by States to the BLS. These reports are based on place of employment rather than place of residence.
Employment data under the QCEW program represent the number of covered workers who worked during, or received pay for, the pay period including the 12th of the month. Excluded are members of the Armed Forces, the self-employed, proprietors, domestic workers, unpaid family workers, and railroad workers covered by the railroad unemployment insurance system. Wages represent total compensation paid during the calendar quarter, regardless of when services were performed. Included in wages are pay for vacation and other paid leave, bonuses, stock options, tips, the cash value of meals and lodging, and in some States, contributions to deferred compensation plans (such as 401(k) plans). The QCEW program does provide partial information on agricultural industries and employees in private households.
3 "Jurisdiction" will be used as a substitute for "county" throughout the article.
4 "Philadelphia City" will be often used as a substitute for "Philadelphia County" throughout the article, given that both terms refer to the same geographical area.
Quarterly Census of Employment and Wages
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