Unemployment Rates by Occupation

For nearly two decades, there has been little change in the relative likelihood of unemployment in various industries.

The lead chart is courtesy of the St Louis Fed study on Unemployment Rates by Occupation.

> This FRED graph shows the unemployment rates for various occupations. What’s striking is that, over the 18-year sample period, the ordering hardly changes. Of course, the magnitude of unemployment responds to what’s happening in the overall economy. But management occupations and professionals, for example, always have the lowest unemployment rates by quite a margin. Mining, agriculture, construction, and maintenance have the highest unemployment rates, whether the economy is in a boom or a recession, with manufacturing and other production occupations a close second. These two are particularly affected by recessions. Sales, office, and service occupations fall in the middle.

> Obviously, what happens in specific labor markets correlates with what happens in the sector at large: For example, construction workers typically work in the construction sector. But this correlation isn’t absolute—a prime example being that managers are sprinkled across all sectors. This data picture shows that choosing which occupation to work in can be more important than which sector to work in.

Cycles

The chart shows the cyclical nature of jobs, especially in mining and construction. Nearly all of the unemployment highs in natural resource and transportation were in January or February.

The same chart for Australia would likely show unemployment peaks in July and August.

Seasonal cycles or not, the charts shows that management is the place to be (assuming you are qualified to be a manager and can actually stand the job).

Difference of Opinion

The Fed concludes "This data picture shows that choosing which occupation to work in can be more important than which sector to work in."

I suggest "Take a job that you like to do and want to do, or you will be unhappy." Just be prepared for volatility if your choice is seemingly not optimal in either salary or likelihood of unemployment.

That said, if you dream of owning a bookstore on account of your degree in English Literature, good luck. You also have to be realistic.

Education does not guarantee a job in your field of choice.

Mike "Mish" Shedlock

Comments
No. 1-5
JonSellers
JonSellers

Managers get to decide who becomes unemployed. They rarely become unemployed themselves.

Michaelf
Michaelf

Reminds me of the difference between an Arts Degree and a large pizza. A large pizza feeds a family of 4.

mark0f0
mark0f0

Careful. An unemployed engineer, for example, can do a single pizza delivery, and voila, they're considered an employed (or unemployed) pizza driver. Not an unemployed engineer. Per the "statistics". People in professions for which job opportunities are extremely limited often aren't even able to gain entry to their profession, in which case, they're not considered unemployed from such either. For example, it is well known that there is extreme unemployment/underemployment amongst STEM grads and engineer, with even top schools (ie: UC Berkeley for example) being unable to substantiate more than 1/3rd of their graduates in STEM finding post-graduation jobs in their post-graduation surveys.

So it naturally follows that "senior" professions will have much lower "official" unemployment numbers than are actually the case, as people will involuntarily switch their occupation to a more junior (read: lower-paid) category. But a waitress who finds themselves unemployed, for instance, rarely will ever make the switch to being a Manager/Professional.

Kinuachdrach
Kinuachdrach

As we all know, definitions of "unemployment" can be very slippery. Managers and professionals may choose to describe themselves as self-employed consultants rather than unemployed, or they may be in a better position to take early retirement. And if a former construction company manager decides to seek employment as a carpenter, would he be listed as an unemployed manager or an unemployed carpenter?

Figures can also be distorted by the very large role government employment plays these days. There was the famous case in Oakland CA some years ago in which the city, facing a budget crisis, laid off the actual streetsweepers but kept their managers on the city payroll.

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