What can we make out of a newly released analysis of private-sector payroll trends?
For one, payrolls are increasing even though the economy is adding jobs at a tepid pace. The analysis finds companies in the private sector added $75 billion in payroll between 2009 and 2010 even though job losses totaled 2.4 million in that same period. If you needed an example of companies trying to do more with less, there it is.
Second, it should come as no surprise that some of the locales with the highest pay per worker are in some of the highest cost of living areas of the nation. Look no further than San Jose CA, where the average pay per worker is more than $85,000 and the cost of living is 54 percent higher than the national average and No. 2 Stamford CT, where the average pay per worker was $76,000 in 2010 and the cost of living is 47 percent higher than the national average.
The list also gives us some clues on industry sectors that are currently in growth mode. San Jose is the epicenter of technology innovation and other major tech centers such as San Francisco, Boston and Seattle are experiencing strong payroll growth.
So, too, are communities in the red hot energy sector, which explains the hefty payroll growth in places like Houston and Midland TX, where the Texas energy industry is fueling major growth. It’s also a major factor communities such as Gilette WY (up 8.75 percent) and Rock Springs WY (up 9.6 percent), both of which are benefitting from Wyoming’s diverse energy sector.
And as demographer Joel Kotkin writes, communities in the energy belt are adding to payroll by adding jobs. “The big winners are in the central energy corridor. Since 2007, Texas has created almost five times as many jobs as New York,” Kotkin notes.
Kotkin notes that states that have embraced energy growth such as Texas, Oklahoma, Louisiana, North Dakota, Wyoming and Alaska, are seeing significant job growth while states that are seen as less friendly to energy exploration, like California and New York, are not. And he notes how Ohio and Pennsylvania, where there have been significant new finds of shale oil and gas, are gaining some economic traction by adopting the model of Texas for energy exploration.
is your community experiencing payroll growth, job growth, both or neither? What are the industry sectors that are driving the trend in your community and what opportunities do you think your community can exploit? Share your thoughts.