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Stephan Whitaker |

Research Economist

Stephan Whitaker

Stephan Whitaker is a research economist in the Research Department at the Federal Reserve Bank of Cleveland. His current work includes research on housing markets and studies of state and local public finance.

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Meet the Author

Christopher Vecchio |

Research Analyst

Christopher Vecchio

Christopher Vecchio is a research analyst in the Research Department of the Federal Reserve Bank of Cleveland. His primary interests include development economics, international economics, and the economics of terrorism.

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09.24.13

Economic Trends

STEM and Healthcare Employment Trends in Ohio, Pennsylvania, Kentucky, and West Virginia

Stephan Whitaker and Chris Vecchio

For decades, Americans have looked toward a future in which growing numbers of jobs in healthcare and science, technology, engineering, and mathematics (STEM) would be needed to replace heavy industry as an economic driver. Business owners, politicians, and economic policymakers have sought ways to accelerate the transition in some cases and ease it in others. Below we assess trends in these fields in the Fourth District.

Like the nation at large, the metropolitan areas of the Fourth Federal Reserve District—Ohio, and parts of Pennsylvania, Kentucky, and West Virginia—have seen growth in STEM and healthcare fields in recent years. A high and growing share of the District’s labor force is employed in these occupations. Unfortunately, employment growth in these fields during the recovery has not been able to offset job losses in office administration, production, and transportation during the recession.

Nationwide, 14.3 percent of the labor force is employed in STEM and healthcare fields. While that may not seem like a lot, workers in these fields are outnumbered only by office/administrative workers. There are more employees in STEM and healthcare than there are in production, construction, and extraction combined. Most of the workers in the STEM/healthcare category are health care practitioners and health support workers (62 percent), while STEM fields account for 38 percent of the total.

Historically, recessions have slowed or stopped some labor market trends while simultaneously accelerating others. The growth of STEM and healthcare employment was one trend slowed by the last recession. Growth went from over 10 percent between 2003 and 2007 in the United States to under 5 percent between 2008 and 2012. However, the trend toward STEM and healthcare work occupying a growing share of the US labor force has accelerated.

Growth of Total STEM and Healthcare Employment in Fourth District MSAs

 

STEM and healthcare as a percent of total employment Growth in STEM and healthcare, percent
MSA 2012 2003-2007 2008-2012
Dayton 18.43 −3.28 5.50
Lima 17.31 −25.69 6.86
Cleveland 16.65 7.86 11.64
Akron 16.24 14.61 12.57
Columbus 16.23 22.90 5.68
Pittsburgh 15.74 18.66 −0.60
Canton-Masillon 15.28 5.92 3.85
Lexington 15.26 11.92 1.96
Cincinnati 15.04 26.34 4.19
United States 14.28 10.66 4.80
Youngstown 13.96 2.39 5.28
Erie 13.77 16.07 −3.67
Toledo 13.67 21.10 −11.18
Wheeling 12.87 3.13 −3.71

Source: Occupational Employment Statistics, Bureau of Labor Statistics.

In the Fourth District, most metropolitan statistical areas (MSAs) have higher STEM and healthcare employment shares than the national average. However, growth has slowed since 2008 in all MSAs except Dayton, Lima, Cleveland and Youngstown. Though Dayton and Lima experienced declines in their STEM and healthcare workforces between 2003 and 2007, they have reversed these in the recovery.

Whether growth in STEM and healthcare positions translate into increases in their share of total employment also depends on the trends in all other types of employment. Since the recession, seven of the thirteen MSAs in the Fourth District have witnessed faster increases in the STEM and healthcare share of their total employment. Lima, Cleveland, and Akron each substantially increased their STEM and healthcare employment after the recession, and they have seen this category account for more than 2 additional percentage points of their total labor forces. The shift toward a local economy driven by STEM and healthcare jobs is amplified by job losses in non-STEM, non-healthcare occupations. Akron, Cleveland, and Dayton each lost approximately 8 percent of their non-STEM, non-healthcare jobs after the recession. Lima lost 12 percent of its non-STEM, non-healthcare jobs.

Growth of STEM and Healthcare Employment Relative to Other Fields in Fourth District MSAs

 

Change in STEM and healthcare's share of total employment, percent
MSA 2003-2007 2008-2012
Dayton 1.36 1.97
Lima 0.23 2.68
Cleveland 1.32 2.55
Akron 1.05 2.61
Columbus 1.74 1.16
Pittsburgh 1.85 −0.03
Canton-Masillon 1.14 1.40
Lexington 1.90 0.72
Cincinnati 0.69 1.33
United States 0.62 1.15
Youngstown −0.23 1.49
Erie 1.60 −0.29
Toledo 1.94 −0.51
Wheeling −0.37 −0.65

Note: The change in STEM and healthcare as a percent of total employment is calculated as (STEM_Healthcare_employment2012/Total_employment2012)—(STEM_Healthcare_employment2008/Total_employment2008) and the equivalent for the earlier period.
Source: Occupational Employment Statistics, Bureau of Labor Statistics.

With respect to particular types of jobs, every category of STEM and healthcare added positions between 2008 and 2012 with the exception of architecture and engineering. Architecture and engineering employment has come down from a high associated with the housing boom, particularly in the subcategory of civil engineers. Growth in some categories was higher in the Fourth District than in the nation—health support and life, physical, and social sciences. Meanwhile, growth in the number of health practitioners (4.7 percent) has been modest in the District relative to the national trend (8.1 percent).

A key to the promise of economic progress through STEM and healthcare employment growth is that these higher-skilled positions are better paying than most other occupations. In the Fourth District, the median wage of STEM and healthcare jobs is third highest ($52,944) relative to eleven other broad occupational categories. Occupations in management and business and finance are higher paying. The median wage of education occupations is similar ($51,234).

While higher-paying jobs are being created, even more lower-paying jobs are being lost. This outcome can be seen in the figure below, which charts the change in employment in various occupational categories from 2008-2012 against each category’s median wage in the Fourth District. Change in employment in a category is reflected in the width of the bar and the median wage in the height of the bar. The higher-paying occupational categories, including STEM and healthcare, have added approximately 125,000 positions in the District. The lower-paying occupations, including office/administration, production workers, and transportation, have shed approximately 288,000 positions.

The recent shift toward more STEM and healthcare occupations appears to be a partial success story. The growth of STEM and healthcare occupations has been substantial, and the pay is relatively good for the people securing these positions. However, in terms of the number of workers employed or total income earned (which supports consumer demand in the local economy), STEM and healthcare jobs are far from replacing the lost positions in office, production, and transportation occupations. Considering the experience of this recovery, policymakers may need to re-evaluate their focus on job creation in STEM and healthcare fields. Two key questions are whether STEM and healthcare occupations can ever be numerous enough to replace positions lost in other fields, and what barriers need to be overcome to achieve greater STEM and healthcare job creation.