Monthly Labor Review April 2002 3

Job Growth in Services

Services: business demand rivals

consumer demand in driving job growth

The services division, a part of the service-producing sector,

contributed more than half of U.S. job growth

between 1988 and 2000;

rising demand from enterprises was key

Bill Goodman

and

Reid Steadman

Bill Goodman is an

economist in the

Division of Current

Employment Statistics,

Bureau of Labor

Statistics. Email:

Goodman_W@bls.gov

Reid Steadman

formerly was an

economist in the same

division. Email:

rsteadma@

andrew.cmu.edu

More than 97 percent of the jobs added

to U.S. payrolls in approximately the

last 12 years were provided by the

service-producing sector. That sector is divided into six major divisions of industries,

including: transportation, communications,

and public utilities; wholesale trade; retail

trade; finance, insurance, and real estate;

services; and government. (See chart 1.) Just

one of the six divisions, services—which includes such diverse industries as healthcare,

entertainment, temp agencies, and business

consulting—gained considerably more than

half the jobs added to the U.S. economy and

became the largest division by far. As late as

1984, the numbers of jobs in the manufacturing, retail trade, government, and services divisions were reasonably comparable. By 1999,

services had about twice the employment of

manufacturing or government and about one

and three-quarters times the number of jobs in

retail trade.1

This article is concerned with the question

of why the services division gained so many

jobs. The long-term upward trend of services

jobs and its causes are the major subjects of

this article; cyclical effects are not addressed.

One way of approaching the present subject

is to trace the demand for the services provided by the division. “Input-output” analysis is concerned fundamentally with producers’ requirements for goods and services in

order to produce other goods and services.

Input-output analysis is used in this article to

quantify purchases of the relevant services by

the various industries of our economy and by

the sources of final demand, such as government, international trade, and personal consumption. 2 This article first describes job

growth as distributed among the various industries of the services division. To explain

job growth, the sales of the various services

are broken down by type of purchaser. In each

major group of industries within the services

division, the greatest source of demand turns

out to be either personal consumption or producers’ needs. Various economic, demographic, political, and social changes that increase demand for certain services are described; so are certain restraints on the growth

of particular services.

The major services industries are each characterized as primarily consumer-oriented, primarily business-oriented, or mixed, in accordance with the quantities of demand from business and consumer. Job trends in the three

totals of business-oriented industries, consumer-oriented industries, and mixed industries are then analyzed in the context of certain

social, economic, and political trends.
4 Monthly Labor Review April 2002

Job Growth in Services

The services division

The main groups of industries in the services division are:3

• certain agricultural services (including, most importantly, landscaping and horticulture)

• hotels and other lodging places

• personal services (such as dry cleaning, hairstyling, and tax preparation)

• business services (such as temp agencies and computer software)

• automotive services

• miscellaneous repairs

• motion pictures

• amusements and recreation

• healthcare

• legal services

• private education

• social services

• museums, botanical gardens, and zoos

• membership organizations (such as associations or

churches)

• engineering and management services (including

consulting)

• miscellaneous services

A clear-cut conceptual definition of the services division

is problematic, as the services included are diverse in nature.

Actually, the division is a miscellaneous category consisting

of those parts of the services sector not claimed by other

divisions such as retail trade or government. In fact, the services division is sometimes labeled as “other services.” The

economic activities of the division may be primarily physical

(for example, repairs); intellectual (example: education); aesthetic (examples: art museums and performance); or otherwise of experiential value (for example, recreation). Serviceproducing industries may function by changing a physical

object (as in auto repairs); the consumer’s self (examples:

healthcare and education); an organization (for example, management consulting); or may have no such readily apparent

object (as in legal representation or professional sports). No

single concept, then, serves to describe all the industries in

the services division.

Because the industries of the division are so diverse, one

would expect that increases in various sources of demand

are responsible for the division’s job growth. The relative

importance of personal consumption and demand from business in driving growth varies to an extreme extent among the

division’s industries. Furthermore, the industries that buy

the greatest quantities of each business-oriented service

vary greatly in accordance with the nature of the service.

Many changes in our society—in demographic characteristics, technology, business practices, government policy, and

individual lifestyle—affect the numbers of jobs in the industries of the division.

The industries adding the most jobs

During approximately the last decade, two vastly different

industries within the services division, business services

and healthcare, were responsible for the largest shares of

U .S. econom y

G oods-producing sector

Agriculture, forestry, fishing

M ining

Construction

M anufacturing

Service-producing sector

Transportation, com m unications, utilities 

W holesale trade

Retail trade

Finance, insurance, real estate

S ervices

P ublic adm inistration 

Chart 1. The divisions of the U.S. economy, according to the 1987 Standard Industrial Classification system
Monthly Labor Review April 2002 5

new jobs in the division.4 (See table 1.) In fact, the two

industries account for more than half the growth in the

division’s jobs.

Business services, as the name implies, almost exclusively sell their output to other businesses. Just 4 percent

of sales were attributable to personal consumption, while

86 percent of business services were sold to businesses.

The remaining portion of the industry’s output was sold

mainly to government.

The business services industry has many components,

but two of them stand out in numbers of jobs gained. Personnel supply (including traditional employment agencies, temp

agencies, and other organizations that find or supply labor to

clients) and computer services (including mass-produced softGrowth of jobs in business-oriented and consumer-oriented services, 1988 to 2000

(in thousands)

Percent of Job growth as Employment

output sold to percentage of in 2000 as a

government total job percentage of

excluding growth in total servicesgovernment services division

enterprises, 2000 division employment

Services division ............ 4 ............ 8 51 0.2 14,956 59 100 100

Total business-oriented

services ....................... 8 ....................... 4 5 9 6,778 88 45 36

Agricultural services .......... 66 26 8 354 792 2

Business services ............. 864 10 5,220 113 35 24

Services to buildings ...... 82 11 6 214 271 2

Personnel supply2 .......... 93 3 5 2,537 188 17 10

Computer services ......... 732 23 1,422 211 10 5

Miscellaneous repair .......... 69 22 6165 0 1

Engineering and

management services ...... 86 4 8 1,188 538 8

Engineering, architectural 94 0 0 287 392 3

Accounting, auditing,

miscellaneous .............. 95 2 3 188 351 2

Management and public

relations services ......... 880 11 582 114 4 3

Total consumer-oriented

services ....................... 7 ....................... 2

104 3–11 6,828 49 46 52

Personal services ............. 16 83 1 195 181 3

Amusements, recreation ..... 22 80 3–2 751 775 4

Healthcare ....................... 3 2

112 3–14 2,990 42 20 25

Offices of healthcare

 practitioners ................ 0 99 1 1,162 608 8

Nursing, personal care

facilities ..................... 0 100 0 485 373 4

Hospitals ...................... 0 2

131 3–31 697 21 510

Home healthcare ............ – – – 427 198 3 2

Private education4 ............. 16 2

119 3–35 758 485 6

Social services ................. 4 92 4 1,351 879 7

Individual, family,

miscellaneous .............. 1 96 3 440 783 2

Job training, vocational

rehabilitation ................ 33 61 6 139 581 1

Child daycare ................ 0 98 2 356 100 2 2

Residential care ............. 0 94 6 417 107 3 2

Museums, etc. ................. 0 2

103 3–3 48 830 0

Membership organizations ... 3 96 0 734 425 6

Religious organizations .... – – – 619 634 4

Total mixed services ........ 4 ........ 6 50 2 1,205 34 812

Lodging places ................. 45 56 3–1 372 242 5

Automotive services .......... 41 56 2 415 503 3

Motion pictures ................. 50 34 1 253 742 1

Legal services .................. 53 41 4 165 201 2

1Figures include intermediate flows of commodities and producers’ investments in software and durable equipment. 2Sales of more than 100 percent indicate that some purchases are of

services produced by government while private-sector production is the base. 3Negative figures indicate that government is a net producer, rather than a

net consumer, of the services.

4

Employment figures represent private education, but sales figures include

some government educational services.

NOTE: Sales figures are from Employment Projections, Bureau of Labor

Statistics. Employment figures are from Current Employment Statistics Division, Bureau of Labor Statistics.

Dash indicates data not available.

Service

Thousands Percent

Growth in jobs Percent of

output sold

to consumers,

2000

Percent of

output

sold to

producers,1

2000

Table 1.
6 Monthly Labor Review April 2002

Job Growth in Services

ware, custom programming, complete custom systems design,

leasing, and more) together gained more than three-quarters

of the 5.2 million jobs added to business services from 1988 to

2000. Personnel supply, however, gained almost twice as

many jobs as computer services. (See chart 2.) Though these

two industries are to some extent tied to the growth of the

companies that contract them, the expansion of personnel

supply services and computer services has been principally a

consequence of changes in business processes. Within the

period of 1988 to 2000, the use of both computer technology

and supplied personnel became much more fundamental in

business operations.

Within the healthcare industry, four components added

tremendous numbers of jobs. Offices of physicians and other

practitioners, nursing and personal care facilities, hospitals,

and home healthcare gained 430,000 to 1.2 million jobs each.

Two of the main factors driving the increases in healthcare are

the development of new medical procedures, which require

additional personnel to perform them, and an increasing proportion of elderly individuals.

Services industries ranking just below business services

and healthcare in numbers of jobs gained are social services

such as daycare, residential care of the elderly, and other individual and family services; engineering and management services (including management consulting); private education;

amusements and recreation; and membership organizations

(including houses of worship). Clearly, the major gainers in

services include both industries primarily servicing businesses and industries primarily serving individuals.

Quantifying demands for services

The input-output tables produced by the Employment Projections unit of the Bureau of Labor Statistics may be used as a

source of data to calculate the portion of a service’s total

sales to intermediate flows in the creation of another product

or service. Input-output data also can be used to calculate

the portion of sales to personal consumption, as well as to

other types of final demand, such as international trade, government, and investment. However, intermediate business

demand, producers’ investment in durable equipment and software, and personal consumption account for nearly all (99

percent) of the sales of commodities produced primarily by

the services division. (See table 1.) In this article, intermediate business demand, producers’ investment in software

(found in sales of computer services), and producers’ investment in durable equipment (found in sales of engineering and

architectural services) are viewed together as purchases by

businesses, and the analysis contrasts purchases by producers with those made by consumers.

Chart 2. Growth of jobs in selected business-oriented or consumer-oriented services, 1988 to 2000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Personnel 

supply

Computer

services

Management,

public

relations

services

Engineering, 

architectural 

services

Services

to

 buildings

Healthcare

Social

services

Amusements, 

recreation

Membership

organizations

Change in jobs, 

(millions)

Business-oriented

 services

Consumer-oriented

 services

Change in jobs, 

 (millions)
Monthly Labor Review April 2002 7

To be exact, a distinction should be made between the

concept of an industry and the concept of a commodity. While

each establishment is classified within an industry on the basis of the establishment’s main economic activity—the production of a good or a service—the establishment may also

engage in the production of a secondary commodity (a good

or service produced at the same work site but to which fewer

resources are devoted). Therefore, the output of an industry

may not exactly equal the output of its main associated commodity. For example, hotels and motels are one industry, and

eating and drinking places are another. If a hotel operates a

dining room as a secondary activity, the personnel working in

food preparation and service there falls into the lodging industry, despite producing a commodity more closely associated with eating and drinking places. The input-output “use”

tables, extensively utilized in this article, quantify the sales of

commodities rather than the sales of the output of industries.

Nevertheless, we believe that the “use” tables are extremely

valuable in explaining the employment trends of industries.

Demand for an industry’s main product or service is surely

relevant to that industry’s hiring.

Most major commodity groups produced primarily within

the services division either are sold to business far more than

to consumers or are sold to consumers much more than to

business. In other words, relatively few main commodity

groups associated with the division serve personal consumption and business demand about equally. Of the 15 main commodity groups associated with the division, 11 sell at least 66

percent of output either to business or to personal consumption. In most of those 11 groups, the percentage of sales to

the main source of demand is even higher—more than 80 percent in 9 of the 11 cases. Furthermore, the 11 groups dominated by either type of demand, as opposed to the four groups

serving each type of demand more equally, have a vast majority (87 percent) of the employment in the division.

Accordingly, the 15 main industry groups of the services

division have been classified for purposes of this article as

business-oriented, consumer-oriented, or mixed. The consumer-oriented groups are most numerous (seven) and, of

the three classifications, have the greatest share of jobs in

the division. Four main industry groups are business-oriented, and four relatively small main industry groups are

mixed. (See table 1.)

The job trends of the business-oriented total and of the

consumer-oriented total show large contrasts. Consumer-oriented services, the most numerous type, have the bulk of

employment in the services division; accordingly, they contributed the greater increase over the period from 1988 to 2000.

But jobs in the smaller group, business-oriented services, grew

at a much higher percentage rate. (See chart 3.) Therefore,

business-oriented services increased their share of jobs in

the division. Consequently, consumer-oriented services deNOTE: Data are seasonally adjusted.

SOURCE: Current Employment Statistics Division, Bureau of Labor Statistics.

Chart 3. Indexed employment in business-oriented, consumer-oriented, and mixed services,

 1988 to 2000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

80

100

120

140

160

180

200

220

80

100

120

140

160

180

200

220

Percent of 1988 level

Mixed

Business-oriented

Consumer-oriented

NOTE: Data are seasonally adjusted.

SOURCE: Current Employment Statistics Division, Bureau of Labor Statistics.

Percent of 1988 level
8 Monthly Labor Review April 2002

Job Growth in Services

clined slightly in their share of jobs. The differences in the

rates of growth among the three classifications are striking.

Jobs in consumer-oriented services increased by 49 percent

over the 12-year period, but business-oriented services grew

by 88 percent. The mixed services increased by 34 percent,

the lowest percentage, and became an even smaller piece of

the division. To a greater extent, services are available either

for consumers or for business, but not so much for both within

the same industry. The development constitutes one form of

increasing specialization in our society. The following table

shows employment as a percentage of total services-division

employment:

1988 2000

 Business-oriented industries ........... 30 36

 Consumer-oriented industries ......... 55 52

 Mixed industries ............................. 14 12

During the 12-year period, some consumer-oriented services

became even more predominantly sold to consumers. In

particular, healthcare, private education, social services, and

membership organizations increased their already large

proportion of output sold to consumers, decreased their

small proportion of output sold to producers, or both.

These shifts in sales constitute an additional trend toward

greater specialization in industries: the consumer-oriented

industries became even more consumer-oriented.

The shifts in sales of consumer-oriented services influenced total sales of the services division toward the consumer. At the same time, the faster growth of business-oriented services influenced sales in the opposite direction, toward sales to businesses. Sales of services-division commodities to businesses increased by 156 percent (in current

dollars) over the 12-year period, while sales of services-division commodities to consumers increased by a considerably

lesser 129 percent. A net result was a slight increase in the

portion of total services-division output sold to business,

and conversely a slight relative decline in the portion sold to

consumers (as shown below).

1988 2000

Percent of services-division

sales attributable to:

 Business demand ................... 45 48

 Personal consumption ........... 53 51

While sales of consumer-oriented services (in current dollars) were greater than those of business-oriented services in

1988, sales of business-oriented services exceeded those of

consumer-oriented services by 2000.

Reasons for growth, restraints on growth

Business-oriented services. Three broad economic developments are highly relevant to the growth of business-oriented

services: contractual labor arrangements (such as

outsourcing), increased construction activity, and changing

technology. Each of the three factors’ effects extended to

multiple business-oriented services.

The effects of outsourcing or other alternatives to traditional, direct hiring are most obvious in the field of personnel

supply, including temp agencies and employee leasing. Excluding the most traditional facet of the industry, namely employment agencies that provide placement in exchange for a

fee, the contracted workers are formally employed by and receive their pay from the help-supply agency, though they are

responsible for the tasks assigned to them by the companies

that purchase their skills. The job increase in personnel supply—2.5 million—was so great that it was slightly more than

three-quarters of the number added to the entire healthcare

industry.

In personnel supply, two potential sources of growth are

readily identifiable. First, industries that use supplied workers may expand, and therefore increase demand for personnel

services. Second, managers of client industries may shift the

compositions of their labor forces to utilize more supplied

workers. In a recent paper, Marcello Estevao and Saul Lach

point to the latter reason for the growth in personnel supply,

citing a change in managers’ hiring behavior as the predominant source of employment growth in the personnel supply

industry.5 They observe that from the mid-1980s to the mid1990s, a surge in demand arose in manufacturing firms for

temporary help supply workers. Many variables factor into

the development of managers’ new hiring practices. According to economists, company managers are taking advantage

of temporary personnel—and the agencies that market them—

for the following reasons:

• Utilizing temporary personnel allows companies to

rapidly adjust their employment to optimum levels that

match current production requirements. This practice

reduces unwarranted expenditures by tying labor costs

closely to present and projected demand.6 Temporary

employees are used as “buffers” to mitigate negative

financial consequences of surges or declines in demand.

The high variance in growth rates of personnel supply

employment substantiates anecdotal evidence that

managers use flexible labor to respond promptly to

changes in demand.

• Agencies now often conduct training of recruits. In

response to the growing need for computer-savvy workers, an increasing number of personnel supply companies are offering to equip workers with fundamental

computing skills. According to the American Staffing

Association, expenditures footed by staffing agencies

for skills training increased to $720 million in 1997 from

$260 million in 1995.7 Because numerous client compa-
Monthly Labor Review April 2002 9

nies benefit from contracting trained workers, economies of scale lessen the financial burden that might otherwise be borne by each company.8

• Contracting through temporary help supply agencies often aids the process of permanent, direct hiring.

Client companies often use temporary workers’ time with

them as a probationary period when the companies can

evaluate the worker for a directly hired position. Utilizing this practice allows companies to expend less time

and money finding, interviewing, and training workers.

This practice potentially decreases turnover rates as

companies hire workers that are good matches for the

positions they fill.9

In summary, the cost efficiency of supplied workers and

the shorter-term commitment of contractual labor arrangements are major reasons why many company managers have

decided to make extensive use of supplied labor.10 The tremendous job growth of the personnel supply industry, an

increase of 2.5 million jobs during the period, is one result.

 The addition of jobs to personnel supply and other industries that sell contractual labor as a substitute for direct hiring

must be interpreted with caution. The growth of contractual

labor represents, in part, a shifting of jobs from industry to

industry rather than sheer growth—if contractual labor were

not available, the clients might hire or continue to employ

people directly. Growth in personnel supply and certain other

industries is to some extent offset by its effects on employment levels in the client industries.

Because contractual labor can be more affordable and often entails a shorter commitment than direct hiring, contractual labor may enable firms to acquire a larger number of workers than they could recruit, hire directly, and train at the same

costs. If so, contractual labor may have the effect of increasing total employment to some extent by lowering its costs,

rather than only shifting employment from one industry to

another.

Contractual arrangements instead of direct hiring also contribute to the growth of management services. Unlike the

formerly typical scenario of a consulting company leaving

management with a report and then ceasing to be involved,

modern consultants often contribute actively to the transformation of a business process, and may leave some of their

own personnel onsite indefinitely to run that process partially

or fully. Facilities support services, another part of the management services industry, has also been on the rise.

Furthermore, the trend toward more contractual arrangement of labor as opposed to simple hiring also affects the

engineering services industry. In the current environment of

constantly changing technology, the proportion of engineers

working directly for manufacturers has declined (to 45 percent from 53 percent), while the proportion in professional

services has risen (to 20 percent from 15 percent). The redistribution of engineers by industry implies an increasing prevalence of contractual engineering.11

Increases in construction activity at least potentially fuel

growth in engineering, architectural, surveying, and landscaping and horticultural services. The construction division purchases 55 percent of those engineering services sold as an

intermediate commodity, largely because of the need for civil

engineering when public works such as bridges or tunnels are

built.

Engineering increased its employment proportionately

more than did heavy construction, suggesting that at least

one other factor also serves as an upward influence on contractual engineering. As previously mentioned, more contracting out of engineering for manufactured products is implied by the shift of engineers away from manufacturing and

into services. From 1988 to 2000, according to input-output

tables, manufacturing, communications, and real estate

bought increased portions of engineering and architectural

services.

According to data from the Current Population Survey, the

increase in numbers of employed engineers from 1988 to 2000

was concentrated in the fields of civil, electrical and electronic,

industrial, and mechanical engineers, as shown in the following tabulation:

Change, 1988 to 2000

 Occupation Thousands Percent

 Engineers ........................ 288 16

 Civil ........................... 70 32

 Electrical, electronic ... 152 27

 Industrial .................... 23 10

 Mechanical ................. 45 15

 All others ................... –2 0

Of these occupations, civil engineers increased by the

greatest percentage. Furthermore, a 76-percent increase of

civil engineers in “other professional services” industries,

which include consulting engineers, suggests that use of contractual engineering for purposes related to structures increased substantially. More broadly, a 63-percent increase of

engineers employed in “other professional services” industries greatly exceeded that of engineers in all industries (16

percent). A general shift toward contractual engineering as

opposed to directly hiring engineers is therefore suggested.

A relationship between construction activity and employment in the architectural and surveying industries is clear.

The employment trends of construction and architectural and

surveying services are extremely close. Employment in architectural and surveying services follows the trend of construction employment much more closely than the trend of

general economic activity as represented by real gross do-
10 Monthly Labor Review April 2002

Job Growth in Services

mestic product. Linear correlation shows that more than 99

percent of the variation in architectural and surveying employment from 1988 to 2000 can be predicted on the basis of

employment in construction.

Growth in the business-oriented services most closely associated with construction was, however, generally at relatively slow rates in the context of business-oriented services.

As shown in table 1, higher growth rates in business-oriented

services were primarily in personnel supply, computer services, and management and public relations—fields more associated with flexible labor arrangements and technological

change.

Between 1988 and 2000, probably the most important

change in business was the widespread incorporation of

computer technology into the workplace. During the time

period, the functionality, speed, and utilization of computers exponentially increased; and computers became vital

business tools and facilitators of greater efficiency. As

the computer in its many forms rapidly penetrated business markets, the demand for personnel to service and

program the computers grew. Like personnel supply, computer services, including the software industry, cater primarily to businesses, generating most of their revenue from

intermediate transactions rather than from consumers. In

2000, 73 percent of computer-services sales were to other

businesses. Excluding government enterprises, government bought 23 percent; and despite the popularity of

home computers, consumers accounted for only 2 percent

of sales.

The scope of the products, knowledge, and services in

which the computer services industry deals is expansive. The

advent of the Internet in the early and mid-1990s made the

industry even more varied. In general, computer service establishments repair, maintain, design, and develop software

and hardware for all types of computers and networks, including Internet service providers.

The upward trend of employment in computer services is

the result of two main factors: first, the continuing development of computer technology, and second, a shift in client

companies’ business models to include more outsourcing of

technological services.

Moore’s Law says that computer chip speed doubles every 18 months. Though seemingly improbable, this “Law”

generally held true throughout the 1990s. Increasing processing speed enabled programmers to create and use a wider

range of more sophisticated applications in business processes with improved speed and efficiency.12 The Wall Street

Journal reports that the cost per million instructions a second in 1995 was one-thousandth the cost in 1985.13 The increased value of computer technology allowed a greater number of businesses to financially justify their purchases of computer hardware and software.

In addition to faster speed, computers became more “userfriendly.” Computer makers and software manufacturers began marketing applications that appealed to those who desired to use computers but were not expert in programming

languages. As such innovations improved the functionality

of computers, they became more viable business tools for

those not explicitly involved in programming.

Another innovation that increased computer usage—and

consequently, the demand for computer services—was the

founding of computer industry standards.14 The most important standard that developed over a series of years was the

acceptance of a highly compatible operating system. Until

the early 1990s, Apple and Microsoft marketed popular competing operating systems that were essentially incompatible.

Because Microsoft decided to license its technology and increase its market presence, its Windows platform eventually

won the lion’s share of the market and became the standard

operating system. Companies were able to invest heavily in

technological capital, including software and hardware, knowing that their systems would not soon be outdated by an

incompatible competing application. As companies invested

in hardware and software , their demand grew for human capital to customize and maintain the software and hardware for

their respective business processes.

The widespread implementation of the Internet also undoubtedly spurred growth in computer services. Since 1995,

the year when the Internet achieved feasibility as a business

medium, the number of jobs in computer services has increased by more than 90 percent.

The increasing speed of computer chips, friendlier applications, creation of industry standards, and Internet

growth have all increased the need for computer services

workers.

While the addition of 1.4 million jobs to the computer services industry is one clear reflection of the constant change

and vast popularity of computer technology, changing computer technology also contributes to the growth of management consulting. Consultants are often used to upgrade clients’ processes that include computer use; indeed, the largest component of a consulting job may be creating or adapting software. The advent of computer technologies in the

workplace and advancing business processes required companies to implement and utilize new systems quickly in order

to stay competitive. The integration of high technology into

almost every aspect of business made using technologysavvy consultants an efficient alternative to direct hires. The

consultants are already organized and experienced in improving business processes that include information processing.

Management consultants, however, by definition differ from

computer services companies in that management consultants are involved in broader changes than upgrading or creating computer technology alone. Just the same, the largest
Monthly Labor Review April 2002 11

aspect of a consulting job may be changing or replacing a

computer system for performing a particular process.

When the business community accepted the Internet as a

viable business tool, clients looked to consultants not only

to advise them in Internet strategies, but also to assist them

in implementing e-commerce business plans and network infrastructure. The role of consultants was therefore further

expanded.

Engineering services also benefit from the constant

demand for more advanced intelligent technology in various products, such as major appliances, small appliances,

and vehicles. In 2000, automotive and auto-parts manufacturers spent $116 million on engineering performed by

outside firms.15 Changing technology in general, almost

by definition, increases demand for various types of engineers (see the preceding tabulation showing increases in

engineers by type).

Table 2 breaks down the sales of business-oriented services by the industry division of the purchaser. Some information on the more specific industries most heavily buying

certain services may be of interest, especially when the division making the greatest purchases is services, a heterogeneous group of industries. Personnel supply is purchased

most within the services division. Within the division, its

biggest clients include quite a variety of industries: miscellaneous business services (such as marketing and telephone

answering, among others), management and public-relations

services, hospitals, computer services, and hotels and motels. When sales of personnel supply to the services division

are divided among business-oriented, consumer-oriented, and

mixed services, business-oriented services buy the greatest

share. The following are purchases of personnel supply services in 2000:

Purchases by industry

of client in billions 16

Business-oriented services17 ......... $18

Consumer-oriented services ......... 13

Mixed services .............................. 5

The services division purchases the greatest share of management and public-relations services as well. The specific

services industries using them most heavily, excluding sales

within management and public-relations services, are hospitals ($15 billion) and engineering and architectural services

($5 billion).

Although the business-oriented industries as a group increased in jobs enormously faster than either the consumeroriented industries or the mixed industries, accounting, auditing, and bookkeeping (as well as engineering and architectural services and services to buildings) had comparatively

low growth. The greatest reason for the low growth in accounting, auditing, and bookkeeping since 1988 is advances

in technology that decreased the time spent on accounting

tasks. One of the greatest inventions of the computer age is

the simple spreadsheet program. The electronic spreadsheet

enabled accountants to move almost all their accounting activities from paper ledgers to computer programs. With a few

keystrokes, accountants can adjust accounts to include new

data and create complicated reports. Tasks that had often

required days necessitate only a few minutes of work. Programmers have expanded the concept of the spreadsheet to

develop complex accounting programs that perform almost

Industry division

 of purchaser

All

types of

commodities

Total

ServicesDivision

commodities

Veterinary,

landscaping,

horticultural

services

Business services

Total Personnel

 supply

Engineering, management services

Miscellaneous,

 repairs Total

Engineering,

architectural

services

Table 2.

Management,

publicrelations

services

Intermediate purchases of selected commodities by industry divison of purchaser, 2000

[In billions]

Mining ....................... $88 $7– $2 $1 –$3 $2 –

Construction ............... 570 114 4 205 674 58 14

Manufacturing ............. 2,702 251 2 127 17 19 35 912

Transport .................... 287 58– 205 21015

Communications .......... 196 67– 203 31362

Utilities ...................... 134 17– 52 0 5 2 1

Wholesale trade ........... 297 110 1 64 10 422 114

Retail trade ................. 470 144 1 959 418–9

Finance ...................... 381 106 – 549 133 –16

Insurance ................... 190 45– 173 0 9 – 6

Real estate ................. 189 716333 31483

Services .................... 1,242 519 5 205 37 13 150 13 65

Government enterprise . 101 151 41 1 7 5 1

Dash indicates less than $500 million

SOURCE: Employment Projections, Bureau of Labor Statistics
12 Monthly Labor Review April 2002

Job Growth in Services

every feature of accounting.18 These advances have significantly reduced demand for accounting labor.

Consumer-oriented services. In numbers of employees,

healthcare is by far the largest consumer-oriented industry in

the division. Among employment gains in major industry

groups of the services division, the healthcare increase was

the second largest in simple magnitude. But because of the

healthcare industry’s enormous employment base, this great

gain represents one of the smaller percentage increases. Although healthcare contributed the second-greatest number of

new jobs to the services division, the industry’s growth in

percentage terms was well below that of the services division

as a whole. Therefore, the proportion of services-division

jobs that were in healthcare decreased slightly.

While increases in the elderly population and the invention of new treatments and diagnostic tools have added to

demand, government and private efforts to control healthcare

costs have prevented greater growth than otherwise would

have occurred. Government, insurers, and employers have

restricted healthcare payments through a vast number of

changes to the rules governing coverage; furthermore, the

Federal Government improved its policing of fraud and abuse

in billings to Medicare.19 These developments, by muting the

growth of healthcare expenditures, contributed to the trend

toward a smaller proportion of consumer-oriented employment

and a greater proportion of business-oriented employment in

the division.

Table 1 shows that job growth in hospitals, on a percentage basis, was relatively slow even compared with other

healthcare industries. Because of hospitals’ relatively slow

pace of growth, hospital employment as a percentage of jobs

in the services division declined to 10 percent from 13 percent.

Three factors contributed to the relatively slow growth rate in

hospitals. First, patients admitted to hospitals increasingly

stayed for shorter periods or were treated on an outpatient

basis. Second, hospitals progressively utilized outsourcing

to reduce expenses. Third, changes in Medicare and Medicaid payments tightened hospital budgets.

Health maintenance organizations (HMOs) played an active role in shortening hospital stays and consequently reducing employment growth. As the costs of healthcare soared,

HMOs grew in popularity by offering low premiums. As a

result, the number of persons enrolled in HMO plans more than

doubled between 1990 and 1999.20 HMOs controlled costs in

order to stay solvent; other types of plans also took measures

to reduce their costs. One way in which HMOs addressed

costs was by regulating, and thereby reducing, the number of

days people spent in hospitals.

Between 1995 and 2000, increases in aggregate State and

Federal hospital care expenditures for Medicare and Medicaid slowed markedly,21 curbing a major source of hospital incomes. Federal initiatives such as those enacted under the

Balanced Budget Act of 1997 enforced new guidelines to control Federal reimbursements to hospitals and other healthcare

facilities. These changes tightened hospital budgets and

slowed hiring of nurses and other staff.22

The increased utilization of outsourcing was a move toward greater efficiency in hospitals. Hospitals increasingly

contracted services that fell outside their “strategic competencies.” Housekeeping, food preparation, transcription, information technology services, and even surgeries outside of

resident surgeons’ specialties were progressively contracted

to others outside the hospital industry. By outsourcing, hospitals took advantage of economies of scale available through

other services companies.23

A large part of the hospital industry’s growth can be attributed to the growth and aging of the U.S. population. From

1988 to 2000, those aged 75 years or more increased by 33

percent—more than two and one-half times the rate of increase

of the general population!24 As people age, their utilization of

health services increases. For example, in 1998, people aged

75 years and older averaged 3,031 days of hospital stay per

1,000 people, in non-institutional, short-term hospitals. That

number of days is almost two times the average number for

those aged 65 to 74, and more than five times the average

number of days for the population as a whole.25

Outsourcing of various services, constraint of revenue from

Medicare and other third-party payers, and the substitution

of outpatient services for some inpatient business slowed

growth in direct employment by hospitals. Despite the changing demographic composition of the United States, hospital

employment growth totaled just 21 percent over the 12-year

period. Cost-cutting policies also affected other healthcare

industries, such as offices of physicians. Over the 12-year

period, employment in healthcare as a whole increased 42 percent. This gain was well below that of the services division as

a whole (59 percent), and was considerably less than half the

percentage growth of business services (113 percent).

Among consumer-oriented major groups, social services

ranked just below healthcare in the generation of more employment. Jobs in social services increased at the outstanding rate of 87 percent over the 12 years. Individual, family, and

miscellaneous social services; daycare; and residential care

facilities (homes for the elderly and others who are unable to

live independently yet are not in need of nursing care) each

gained more than a third of a million jobs. Job training and

vocational rehabilitation added a lesser but still substantial

139,000 jobs.

Certain possible explanations for the growth of daycare

and residential care—explanations that one might expect to be

the major ones—account for surprisingly little of the growth.

One factor contributing to the use of social services might be

greater employment in general, leaving fewer persons free to
Monthly Labor Review April 2002 13

care for children or elderly relatives. But in fact, the proportion of the over-16-year-old noninstitutional population that

was employed increased only slightly—to 64.5 percent from

62.3 percent—from 1988 to 2000.26 Employment among mothers with 3- to 5-year-old children increased to 68 percent from

57 percent from 1988 to 2000, accounting for only some of the

100-percent increase in daycare employees. Changes in the

population of young children also account for a small part of

the gains in daycare employment. The resident population of

3- to 5-year-olds rose by only 4.3 percent from 1988 to 2000.

During that time, the ratio of daycare employees to the 3- to

5-year-old population nearly doubled, to 6.2 percent from 3.3

percent. Importantly, daycare became much more affordable

during the period. Public and private initiatives including tax

breaks like the Earned Income Credit and tax-free employerprovided dependent care in effect lowered the cost to parents.27 State funding of preschool programs, including many

run by privately owned entities, also contributed to the growth

of the social services industry. New York and Georgia have

legislated universally available preschool. In both States,

funding goes to many private preschool programs.28

The population who are 75 years of age and older increased

substantially, by 33 percent. Still, the 107-percent increase in

residential-care facility employees must reflect other social

changes as well. During the period, “assisted living” facilities

became increasingly popular among the oldest demographic

groups. Such facilities offer the elderly the freedom of living

independently of relatives but provide assistance with tasks

that are physically difficult, such as food preparation and

cleaning. The mix of independence and convenience has made

assisted living facilities extremely popular. In 1998, an estimated 75 percent of all construction for seniors consisted of

assisted living units.29

Facilities that provide assisted living arrangement have

been in existence for a long time, but only in recent years have

they been widely operated as profit-making establishments.

In the 1970s, nonprofit groups commonly maintained residential care facilities. Now for-profit companies operate an estimated 90 percent of assisted living establishments.30

A legal framework that accommodates seniors’ desires to

live in assisted living facilities is also taking shape. As of June

2000, 38 States were already reimbursing costs of assisted

living or board and care through Medicaid or had approval to

do so, and other States were in various stages of implementing similar funding structures. By reimbursing living costs,

the governments indirectly increased demand for assisted living complexes.31

Private education added more than 750,000 jobs from 1988

to 2000, but those jobs represented just a 48-percent increase,

relatively low compared with other services industries. The

largest component of private education, colleges and universities, increased at the still lower rate of 32 percent. Anecdotal

evidence indicates that enrollment was limited by the alternate

opportunities presented by a favorable job market.32 Also,

rising costs of a college education have been cited as a factor

that discourages enrollment.33

The gain of more than 700,000 jobs in membership organizations was primarily in religious organizations, which

gained 619,000 jobs. Employment in religious organizations increased by 63 percent, a higher-than-average rate

within the services division.

Employment in amusements and recreation increased

by 77 percent over the period, considerably outperforming

the services division as a whole. Many types of entertainment or recreation added large numbers of jobs, as shown

in the following table:

Increase in jobs,

1988 to 2000

Industry Number Percent

Amusement and recreation

 not elsewhere classified34 ........... 206,000 129

Membership sports,

recreation clubs .......................... 117,000 49

Physical fitness facilities ................. 110,000 103

Public golf courses ........................... 89,000 255

Amusement parks ............................ 60,000 73

Producers, orchestras, entertainers .. 59,000 48

Coin-operated amusement devices .. 52,000 205

The separate, smaller, but arguably analogous industry

museums, zoos, and botanical gardens35 is similar in that it

provides leisure-time activity. This small industry increased

its employment at about the same rate as amusements and

recreation. Both industries are likely to benefit from the overall population’s increased disposable income, which normally

encourages travel.36 Americans had much more money to

spend in 2000 compared with the late 80s. Real disposable

personal income rose 37 percent in aggregate, or 22 percent

per capita, during the 12-year period ending in 2000.37

Despite the various substantial increases in consumer-oriented employment, the 49-percent increase in combined consumer-oriented industries was far below the 88-percent increase in the division’s business-serving industries. Yet the

49-percent increase in consumer-oriented industries was about

twice the rate of increase in all nonfarm payroll employment

(up 25 percent during the 12-year period).

Mixed services. Among the four industries serving personal

demand and intermediate business demand fairly equally, only

motion pictures grew faster in employment than did the services division in general. The motion-picture industry increased its employment by about 250,000 jobs or 74 percent.

As the industry includes the making of television commercials and corporate training films in addition to feature films

and television shows, 50 percent of the sales are to business

demand. Film production is one of the industries that ben-
14 Monthly Labor Review April 2002

Job Growth in Services

efited from the growth of computer technology. Demand for

television advertising of websites was exceptionally strong

late in the period, increasing the overall demand for television advertising.38

Employment in the three remaining mixed industries grew

at rates lower than the average of the services division. The

automotive services industry grew by a relatively low 50 percent. The remaining mixed industries—legal services and lodging places—grew 20 percent and 24 percent, respectively.

Extended hours. Although some factors stimulating growth

were exclusive to a small cluster of industries, other factors

undoubtedly influenced a large number of industries and

drove the fast growth characteristic of most services in the

late 1980s and through the 1990s. One such factor is the

elongation of business hours. Establishments classified as

services often win customers by marketing “convenience.”

One element of convenience in service industries is accessibility. To be more accessible, and therefore more attractive to

clients, establishments are increasing their business hours

and number of days per week of operation. These establishments operate on the premise that customers want to access

services when their need or desire is most pressing. As a

result, computer specialists work on call, childcare establishment are staying open late into the evening and on weekends,

and temporary personnel work whenever the company contracting them needs their services to meet demand. As establishments increase their hours to become more accessible,

employment in services increases.39

Government demand

Although consumer demand and intermediate demand from

business together account for 99 percent of the sales of the

services division’s main activities, certain industries of the

division serve government to a fair extent. Computer services

and management and public relations services each sell more

than 10 percent of their output to government final demand.

(Final demand from the public sector excludes demand from

government enterprises, which are public entities that sell a

product or service. The Postal Service is a good example of a

government enterprise.)

About two-thirds of the computer services sold to publicsector final demand were sold to the Federal Government as

opposed to State and local governments. Yet increases in

demand were concentrated in State and local governments, as

shown in the tabulation below, showing purchases as percentages of output:

Year Federal Government State and local

government

1988 ......... 14 5

2000 ......... 15 8

In 2000, management and public relations services, such

as management consulting and contractual management of

facilities, sold 11 percent of their output to government final

demand, mainly to State and local governments. The percentage of output sold to government final demand was considerably reduced from 1988, as shown in the following tabulation:

 Year Federal Government State and local

government

 1988 ........ 10 8

 2000 ........ 3 9

By 2000, engineering and architectural services sold a

vastly reduced portion of their output to the final demand of

the Federal Government. The proportion of engineering and

architectural services sold to government final demand was

a net 6.0 percent in 1988 and a net 0.02 percent in 2000. A major

factor in the reduction of Federal Government buying of engineering was the end of the Cold War and the consequent

“peace dividend” or reduction in defense spending.40 In 1988,

defense bought 8 percent of engineering and architectural

services; the defense share was reduced to 2 percent in 2000.

Two of the three services industries discussed in this section,

then, sold a considerably reduced portion of their output to

government by 2000. The total percentage of commodities

produced by the services division as a whole and sold to

government final demand were greatly reduced. While 1.4

percent was sold to government final demand in 1988, in 2000

only 0.2 percent was.

International trade

International trade provided a small but increasing market for

the output of the services division, providing further evidence

of an increasingly international economy. From 1988 to 2000,

international trade of commodities provided mainly by the

division increased to 0.8 percent from 0.6 percent. Two commodities exhibited relatively high net sales of output to international markets. In each of the two services, net international sales remained a fairly small percentage of output but

increased impressively from 1988 proportions.41 The following tabulation shows net exports (exports less imports) as a

percentage of industry output:

Year Motion pictures Engineering, archi-

 tectural services

1988 ..... 9.8 3.3

2000 ..... 16.1 6.1

Conclusions and the future

Outsourcing and other flexible labor arrangements, constantly

changing intelligent technology, and increased construction
Monthly Labor Review April 2002 15

activity, as well as strong general economic growth, powered

the vast increases in business-oriented services. During the

12 years, jobs in business-oriented services increased at a

much greater rate than those in consumer-oriented or mixed

services. Businesses’ willingness to invest in ever-advancing technology, then, has been one key factor. In addition to

the Internet, frequently changing versions of internal business software and hardware and the making of more intelligent devices in general—including vehicles and home appliances—are relevant. Both the continuous acquisition of new

technology and flexible labor arrangements portray the attitude of adapting to frequent change in the business environment, and thereby also contributing to frequent changes.

Despite the proportionately greater gains of business-oriented services, consumer-oriented services still, though

barely, include a majority of the employment in services. Because of the greater scale of the consumer-oriented group of

industries, its job increase in absolute terms slightly exceeded

that of business-oriented services.

A number of the trends depict a society that is in some

ways increasingly dedicated to future investment by means

of both capital and increased effort. Business-oriented services—such as upgrading of software and intelligent machinery, services related to construction, and improvement of business processes with the aid of consultants—may all be interpreted as present investments for a wealthier future. The

extension of business operating hours may be interpreted in

the same way. Even two rapidly increasing social services,

daycare and residential care, enable some people to work outside the home instead of caring for relatives, and to contribute

to economic expansion.

Rapid growth of certain other industries, however, is of an

opposite nature. Amusements and recreation; museums, zoos,

and botanical gardens; and religious organizations grew rapidly and from the point of view of demand have little to do

with building wealth for the future. At some point on the

income scale, work may reach a point of diminishing returns

for many individuals, perhaps limiting the number of two-income households or contributing to earlier retirements. The

extension of the lifespan also has the effect of increasing the

length of retirement and the number of retirees at a given

point in time.

 Whether the trends described in this paper continue, and

to what extent, depends on a number of factors that cannot be

predicted with confidence. The factors include, but are not

limited to: the future popularity of the Internet—and perhaps

of other, unforeseen technology—on the part of both the

business community and the public; the future frequency of

upgrades of software and other products; the need for workers per unit of output in an increasingly automated world in

which even the creation of software and engineering is made

more efficient by computer technology;42 future healthcare

policy; and family lifestyles as they affect demand for social

services like daycare and elderly care.

Notes

1

 Data representing employment as used in this article are from the

Current Employment Statistics (CES) program, which surveys nearly

380,000 nonfarm employers monthly. For more information on the

CES program’s concepts and methodology, see BLS Handbook of Methods, Bulletin 2490 (Bureau of Labor Statistics, April 1997), chapter 2,

pp. 15–31. These data are available on the Internet at http://

www.bls.gov/ceshome.htm.

2

 Input-output data are prepared by the Bureau of Economic Analysis, U.S. Department of Commerce, and for purposes of labor issues are

further processed by the Office of Employment Projections in the

Bureau of Labor Statistics. The Office of Employment Projections

provides projected figures for years not covered by Department of

Commerce input-output tables. The input-output statistics used in this

article are from Office of Employment Projections, BLS sources.

3

 The industry classifications used in this article, except for the

assignment of business-oriented, consumer-oriented, or mixed status,

are from the Standard Industrial Classification Manual 1987 (Washington, DC: Executive Office of the President, Office of Management

and Budget).

4

 The year 1988 was chosen as the starting point because several of

the industries under study have time-series of employment starting in

1988. That year, fortunately, is a good choice because of its cyclical

comparability to the ending point (2000). Both years were prosperous

ones in well-established economic expansions.

5

 Marcello Estevao and Saul Lach, The Evolution of the Demand for

Temporary Help Supply Employment in the United States, NBER Working Paper 7427 (Cambridge, MA, National Bureau of Economic Research, Dec. 1999).

6

Report on the American Workforce (Washington, DC, U.S. Department of Labor, 1999), p. 22.

7

 Timothy W. Brogan, Annual Analysis, American Staffing Association, March 2000, on the Internet at http://www.staffingtoday.net/

staffstats/analysis99.htm.

8 Report on the American Workforce, p. 4.

9 Report on the American Workforce, pp. 22–24; and Edward A.

Lenz, How Staffing Services Benefit Workers and the Economy, American Staffing Association, March 15, 2000, on the Internet at http://

www.natss.org/staffstats/issuepapers1.htm.

10 See Angela Clinton, “Flexible labor: restructuring the American

work force,” Monthly Labor Review, Aug. 1997, pp. 3, 16.

11 Employment by occupation and industry are from the Current

Population Survey.

12 In 1965, Gordon Moore, co-founder of Intel, observed that since

the invention of the integrated circuit, or processing chip, the transistor capacity on chips had doubled every year. He predicted that this

exponential trend would continue, and his theory was later dubbed

Moore’s Law. Though popular computing culture has altered Moore’s

Law to extend the period in which transistor capacity doubles to every

18 months, Moore was correct in predicting the rapid expansion of

capacity. From Webopedia, Definition: Moore’s Law, October 19, 2000,
16 Monthly Labor Review April 2002

Job Growth in Services

on the Internet at http://webpoedia.internet.com/term/m/

moores_law.html; and Intel.com home, on the Internet at http://

www.intel.com/research/silicon/mooreslaw.htm.

13 Jim Carlton, “Technology (A Special Report): The Technology—It Seems Like Yesterday: the PC has come a long way and quickly,”

Wall Street Journal, November 16, 1998.

14 Carlton, “Technology (A Special Report) . . .”

15 From 2000 “use” table from Employment Projections, Bureau of

Labor Statistics.

16 Use table, Employment Projections, Bureau of Labor Statistics.

17 Excluding personnel supply itself because intraindustry sales are

not readily interpretable in this context.

18 Gary Seigel, “Counting More, Counting Less: The New Role of

Management Accountants,” Strategic Finance, November 1, 1999.

19 Cynthia Engel, “Health Services Industry: Still a Job Machine?”

Monthly Labor Review, March 1999, pp. 3–14.

20 InterStudy Publications, Minneapolis, The InterStudy Competitive Edge, annual; also Bureau of the Census, Statistical Abstract of the

United States: 2000 (120th edition, Washington, DC, 2000), Chart 175.

21 Health Care Financing Administration, “National Health Expenditures Table 5,” on the Internet at http://www.hcfa.gov/stats/nheoact/tables/t5.htm.

22 At the end of the 12-year period under study, specifically in

December 2000, Federal healthcare payments to providers became

more generous. Hiring in the healthcare industry, after increasing by

only 1.6 percent in 2000, accelerated to a 3.0 percent annual rate in

2001 despite the general economic slowdown.

23 Scott Hensley, “Survey Shows More Hospitals Turning to Outside

Firms for a Broad Range of Services,” Modern Healthcare, Jan. 13,

1997.

24 Bureau of the Census, National Population Estimates found on

the Internet at http://www.census.gov/population/www/estimates/

uspop.html.

25 National Center for Health Statistics, U.S. Department of Health

and Human Services, Vital and Health Statistics, Series 13; and unpublished data; also Statistical Abstract . . .2000, Chart 199.

26 Table A-1, “Employment status of the civilian non-institutional

population 16 years and older, 1968 to date,” Employment and Earnings, Jan. 2001, p. 9, on the Internet at http://stats.bls.gov/pdf/

cpsaa+1.pdf.

27 William Goodman, “Boom in Day Care Industry the Result of

Many Social Changes,” Monthly Labor Review, Aug. 1995, pp. 3–12.

28 Linda Jacobson, “Plans for Universal Preschool gain Ground in

New York State,” Education Week, Oct. 25, 2000. See also the website

of the Georgia Pre-K Program on the Internet at http://

www.osr.state.ga.us/whatisprek.html.

29 Trends and Data: Aging Housing and Services Field, American

Association of Homes and Services for the Aging, 1999. Quoted at the

American Association of Retired Persons, Assisted Living in the United

States, on the Internet at http://research.aarp.org/il/

fs62r_assisted.html.

30 Linda A. Johnson, “Growth Continues at Fast Pace for Assisted

Living Centers,” The Journal Record, Nov. 25, 1998.

31 Robert Mollica, State Assisted Living Policy: 2000 (National Academy for State Health Policy, 2000).

32 See for example Gregory St. Martin, “Boston U.: High schoolers

skipping college for high tech jobs,” U-Wire, April 13, 2000; and James

Salzer, “College enrollment slows: Strong economy blamed for failure

of some schools to meet targets,” The Atlanta Constitution, May 11,

2000; and Carol Innerst, “College enrollment declines slightly, continuing trend; availability of jobs partly responsible,” The Washington

Times, Jan. 20, 1996, p. A3.

33 Rene Sanchez, “Colleges Compete for Cost-Conscious Students;

Tuition Deals Among Innovations That Seek Hedge Against Inflation,”

The Washington Post, Mar. 21, 1995, p. A1.

34 “Amusement and recreation services not elsewhere classified”

include a vast variety of establishments from aerial tramways to yoga

instruction. Sports instruction of many kinds is included.

35 Only privately owned zoos, museums, and botanical gardens are

included in the category; publicly owned institutions are classified in the

government division.

36 The incidence of flying increases with income, according to Air

Transport Association of America, Air Travel Survey 1993, 1994, p.

III–14. Furthermore, the percentage of trips by airline that were taken

for recreational purposes increased substantially from 1977 to 1997.

(See Air Travel Survey 1998, 1998, p. V–5.)

37 Disposable income statistics are from the Bureau of Economic

Analysis, U. S. Department of Commerce, on the Internet at http://

www.bea.doc.gov/bea/dn/nipaweb

TableViewFixed.asp?SelectedTable=27&FirstYear=2000&LastYear=2001&Freq=Qtr.

(visited Aug. 3, 2001).

38 Skip Wollenberg, “Internet Advertising Tops $1 Billion,” Pittsburgh Post-Gazette, Dec. 14, 1999.

39 Roger Bull, “Open All Night In a 24-hour Economy,” The Florida

Times-Union, November 4, 1999; Rob Kirkbride, “After Midnight,

Night Workers Propel the 24-hour Economy,” The Grand Rapids Press,

September 3, 2000; and Karen Robinson-Jacobs, “The Day-Care Night

Shift Valley Network Offers Solutions to Parents Who Work Odd

Hours,” Los Angeles Times, September 27, 1998.

40 See R.A. Ellis, At the Crossroads: Crisis and Opportunity for

American Engineers in the 1990’s, special edition of Engineering

Workforce Bulletin (Washington: American Association of Engineering

Societies, Inc.), Jan. 1994.

41 From “FD–AGG” tables, Employment Projections, Bureau of

Labor Statistics.

42 R.A. Ellis, At the Crossroads:...