Where Jobs Are Really Being Created (It's Not Silicon Valley)

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The buzziest part of the economy — the social media startups centered in Silicon Valley — were once heralded as a way to kickstart the economy. Now that there's some good news on the job front — unemployment lower than it's been since January 2009 and 114,000 new jobs last month — it's clear that's not where job growth is coming from. Back in the depths of the recession, when manufacturing and financial services jobs were getting hammered, many predicted that the start-up scene would help lift us out of the recession. See: "Stimulus 2.0: It's The Startups, Stupid," a 2009 editorial LinkedIn founder Reid Hoffman wrote in The Washington Post. Even the White House looked at this opportunity, enlisting Google's Eric Schmidt to consult with President Obama on an economic plan to "jumpstart innovation."

But new businesses aren't where this recovery is at, as The New York Times's Catherine Rampell reports. Not only have fewer new establishments opened, but the ones that have hire fewer employees, as the graphs below, also via the Times, show. 

So, if it's not tech and social media start-ups, where has all this job creation come from? Most of the new jobs last month came from health care, transportation and warehousing and financial services, with little change in other major industries, including the sectors under which social media start-ups and apps would fall, according to the Bureau or Labor and Statistics. Let's take a closer look at what that really means. 

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Even before and throughout this recession, this sectors has continued to grow,as this graph via Slate's Matt Yglesias shows.

This month was no different, with the healthcare industry added 44,000 new jobs, most of them in ambulatory care services. Hospitals also added 8,000 jobs and nursing and residential care another 5,700. Over the past year, employment in healthcare has risen by 295,000 and is expected to grow another 3 million by 2020, according to a recent Georgetown study, much of it having to do with the aging boomer population

Transportation and Warehousing

In September, transit and ground passenger transportation added 9,000 jobs and warehousing and storage another 4,000. Warehousing and storage had the second biggest gain in that sector. We imagine e-commerce had something to do with this. Amazon for example, is on a warehouse building spree, to get more same-day shipping, which would also have an effect on transportation. The biggest growth area there, however, was in transit and ground passenger transportation. 


From BLS: "Employment in financial activities edged up in September (+13,000), reflecting modest job growth in credit intermediation (+6,000) and real estate (+7,000)." We 


Here's some good news, for me at least. Blogger jobs are also growing, as Slate's Matt Yglesias pointed out in the chart below that compares healthcare services (the biggest growth sector this month) with "other information services," which Yglesias believes mean Internet writing jobs. 

Public School Education

As local governments start to expand their budgets, state government added 13,000 jobs in September, many of those concentrated in education, notes Wonkblog's Suzy Khimm. This marks their third straight month of public gains, a nice upward trend. "This is the first time since March–May 2010, when the Census Bureau was adding temporary workers for the decennial census, that we have had three successive months in which government employment increased…The latest BLS statistics show that government employment is now adding to rather than subtracting from employment growth," Brooking's Gary Burthless told her.

This article is from the archive of our partner The Wire.