LEARN / GLOSSARY
Employment share
A sector’s employment divided by total nonfarm employment. It falls when other sectors grow faster, which means a falling share is not by itself evidence that the sector shrank.
Definition
Employment share is the proportion of total employment accounted for by a sector, calculated as sector employment divided by total nonfarm employment. Because the figure is a ratio, it moves when either the numerator or the denominator changes, and a reader cannot tell which from the share alone.
Why the dictionary version is insufficient
A falling employment share is routinely presented as evidence of sectoral decline. The share can fall while sector employment is rising, if employment elsewhere rises faster, which is what growth in a diversifying economy looks like. Manufacturing’s share of American employment peaked well before its absolute level did, and the two measures therefore give different answers to the question of when decline began.
Measurement noteBLS publications report manufacturing’s peak employment share as 32 percent in May 1953 in one article and 38 percent in 1943 in another, reflecting different denominators and periods. Neither is an error. A source citing one figure without naming its series is providing less information than it appears to.
Why it matters for capacity
Share and level answer different questions, and confusing them is the most common error in the public argument about industrial decline. A country concerned with productive capacity is asking about levels and capabilities, and the share statistic cannot answer either.
Related terms
Deindustrialization · Industrial production index · Value added
Appears in
When Did American Deindustrialization Begin?
Read next
When Did American Deindustrialization Begin?
Sources
- U.S. Bureau of Labor Statistics, Current Employment Statistics, series CES3000000001. fred.stlouisfed.org
- U.S. Bureau of Labor Statistics, “Forty years of falling manufacturing employment,” Beyond the Numbers, vol. 9 no. 16. bls.gov