ARCHIVED  August 1, 1997

Target job-recruitment strategies to greatest needs

Target job-recruitment strategies to greatest needs

Many people ask us which industries create “white-collar” jobs, believed to be clean and high-paying, and which industries create “blue-collar” jobs, believed to be lower paying and associated with dirtier manufacturing processes.The truth is, most industries create, or at least indirectly stimulate, both. We estimate that in Northern Colorado, approximately 41 percent of workers are blue-collar, 40 percent are white-collar, and 19 percent are government, which includes both.
In manufacturing, approximately 22 percent of employees are machine operators, 14 percent are managers, 13 percent are secretaries and records processing, 6 percent are engineers, 6 percent are laborers, and the other 39 percent are widely distributed among other occupations.
It’s more important to examine how much income is directly and indirectly generated for each job in Northern Colorado. This income is used to hire more workers to meet intermediate demand and the purchases of local workers.
Which sectors in our economy pay the highest wages? We can divide wages and salaries by employment and get an approximation.
The electronic computer sector (Hewlett-Packard Co.) has an average wage per employee of almost $64,000, followed closely by malt beverages (Anheuser-Busch Cos.) at more than $61,000. Photographic equipment (Eastman Kodak Co.) wages average more than $48,000, and internal-combustion engines (Woodward Governor Co.) more than $42,000.
The lowest wages are in the basic agricultural sectors, where average annual wages and salaries are usually $2,000 or less.
We can also examine the total income generated in the Northern Colorado economy for each employee in a specific sector, an income multiplier per employee. What we find is that capital-intensive industries with many employees generate the largest amount of total income in our economy.
The capital-intensive nature requires the support of the finance sector, the construction infrastructure, highly trained, technical operators, and significant maintenance support. The highly paid employees (to complement the large capital investment) require larger homes and more services and purchase more consumer items. New government facilities generate more than $230,000 of income in the economy for each employee in the sector, malt beverages more than $106,000, electronic computers almost $87,000, and photographic equipment and meat packing about $79,000.
At the opposite end of the total income generated/employee continuum are the agriculture sectors and the service sectors near the end of the consumption chain.
These sectors produce our basic agricultural foodstuffs, such as livestock, or provide services and products that consumers buy for final consumption, thus stimulating no further spending in our economy. The range-fed cattle sector generates only $16,000 per employee and bowling alleys only $18,000 per employee.
We can also examine value added per employee in the industries of the Northern Colorado economy. Value added is the return to all factors of production employed in our economy: labor, capital, land and entrepreneurship. Capital-intensive industries using relatively few employees will create the most value added.
Natural-gas liquids is the leading industry, creating more than $750,000 of value added per employee. Malt beverages is second, creating $266,000 of value added per employee. Electric services are also very high. Photographic equipment (Kodak) creates more than $110,000 of value added per employee. Electronic computers create more than $95,000 per employee.
Some of the lowest ratio, but big employers, include laundry and cleaning shops at $11,400 and services to buildings at $11,800. Meat-packing plants (Monfort) create only $12,300 of value added in the local economy for each employee, i.e., it’s a more labor-intensive industry paying relatively low wages.
Employment multipliers measure the employment interrelatedness of each sector with the rest of the economy, i.e., how many jobs in the rest of the economy does one job in a specific sector create.
Natural-gas liquids creates more than 24 jobs in the rest of the economy for each job in that sector. New government facilities create almost 11 jobs, and meat-packing plants create almost five jobs to support each job in the meat-packing industry. Malt beverages create 3.23 additional jobs, banking creates 3.27, and electric services 2.76.
Employment multipliers for most sectors are in the 1.75 to 3.0 range, with capital-intensive industries being higher and labor-intensive industries being lower.
So, what’s an economic-development director to do? What industries to recruit? If the community is interested in the highest wages, recruit companies such as Hewlett-Packard, Anheuser-Busch and other high-technology companies. However, if social concerns are the focus, social services agencies should focus on agriculture and its low-paid, part-time, and migrant workers.
If we’re interested in maximizing the income generated in the rest of the economy for each new job in a specific sector, we should focus on recruiting or growing capital-intensive companies that employ large numbers of highly trained, highly paid technical employees.
If we’re interested in labor-intensive industries to put our unemployed to work, we should encourage the federal government to locate offices here and encourage growth in service industries.
There can be many economic-development goals in a community, and each one will dictate that a different recruitment strategy be followed.

Target job-recruitment strategies to greatest needs

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Many people ask us which industries create “white-collar” jobs, believed to be clean and high-paying, and which industries create “blue-collar” jobs, believed to be lower paying and associated with dirtier manufacturing processes.The truth is, most industries create, or at least indirectly stimulate, both. We estimate that in Northern Colorado, approximately 41 percent of workers are blue-collar, 40 percent are white-collar, and 19 percent are government, which includes both.
In manufacturing, approximately 22 percent of employees are machine operators, 14 percent are managers, 13 percent are secretaries and records processing, 6 percent are engineers, 6…

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