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The Tech-Ecommerce Sector is the Leading Job Creator in the Economy

By: Michael Mandel / 06.11.2021

Progressives are supposed to care about jobs. Yet the collection of anti-tech bills just released by members of the House Judiciary Committee go after the companies and industries that have been the most reliable source of job creation in recent years.

Using the methodology developed in our April 2021 paper, Innovative Job Growth in the 21st Century, we calculate that the tech-ecommerce sector has replaced the healthcare sector as the biggest creator of jobs in the U.S. economy.  In the five-year stretch from 2015 through 2020, the tech-ecommerce sector added more than 1.7 million jobs. That’s compared to almost 1.2 million jobs for the healthcare sector, including social assistance.

Moreover, these tech-ecommerce jobs are spread over the entire country. Tech-ecommerce job growth from 2015 to 2020 exceeded healthcare job growth in 36 states, including the District of Columbia. The top ten states for tech-ecommerce job growth start with California, Texas and Washington, but also include Florida, Georgia, Ohio, Pennsylvania and Illinois (see table below).

In terms of jobs, the top tech-ecommerce companies compare well to the great manufacturing companies of the past. The top five tech-ecommerce firms—Apple, Alphabet, Microsoft, Facebook, and Amazon—employed 1.8 million workers globally as of early 2021. By comparison, the top five industrial firms by stock market value in the peak manufacturing employment year of 1979—GM, GE, IBM, Kodak, and Dupont—had a total global employment of 1.9 million, just slightly more.

What about pay?  The average annual pay in the tech-ecommerce sector is higher than average annual pay in healthcare in every state except for one (Oklahoma). This includes all positions and roles, across the whole universe of tech-ecommerce jobs, from fulfillment center workers to software developers.  Average tech-ecommerce pay is higher than average manufacturing pay for 43 states, including the District of Columbia.

Note that these figures include a large number of non-college workers. Our analysis of government data shows that roughly 40% of workers in tech-ecommerce industries have less than a bachelor’s degree. On average, they are earning at least as much or more as they would be making in manufacturing, with the big difference that tech and e-commerce firms are hiring non-college workers without experience at a much faster rate than manufacturers are.

As the saying goes, if it ain’t broke, don’t fix it. Progressives should appreciate the job creation record of the tech-ecommerce companies rather than trying to break them up.

 

Top states for tech-ecommerce job creation

Job change, thousands, 2015-2020

Tech-ecommerce

Healthcare and social assistance

California 331.8 267.7
Texas 170.7 109.8
Washington 107.1 40.2
Florida 100.8 95.1
New York 85.4 142.6
Georgia 63.9 39.4
New Jersey 61.7 5.9
Ohio 60.4 6.0
Pennsylvania 57.2 56.6
Illinois 57.0 6.3
North Carolina 51.3 16.7
Arizona 46.8 56.8
Colorado 41.9 22.6
Virginia 40.4 16.7
Tennessee 37.1 16.5
Maryland 35.9 3.4
Massachusetts 34.6 2.6
Indiana 33.8 25.7
Michigan 29.3 -2.5
Nevada 26.3 20.3
Missouri 24.3 18.2
Oregon 24.2 42.8
Utah 24.1 20.2
Kentucky 20.9 11.7
South Carolina 17.8 14.8

 

Note: The tech-ecommerce sector includes four tech industries and three ecommerce industries. The four tech industries are software publishing (NAICS 5112); data processing and hosting (NAICS 518); Internet publishing and search, and other information services (NAICS 519); and computer systems design and programming (NAICS 5415). The three ecommerce industries are electronic shopping and mail order houses (NAICS 4541); local delivery (NAICS 492); and ecommerce fulfillment and warehousing (NAICS 493).