For a great illustration of how the laws of big and small numbers work – and how strongly they can impact pictures of economic reality – check out the Wall Street Journal‘s recent analysis of some new Labor Department jobs projections, and then look at the projections themselves.
Every two years, Labor (bravely? foolhardily?) tries to predict the shape of things to come in the American jobs market. In a year-end post for the Journal, correspondent Nick Timiraos spotlighted an interpretation by economist Jed Kolko emphasizing that “the fastest-growing [jobs over the next decade] are projected to be those that require some form of advanced degree—either a master’s, doctorate or professional degree. At the same time, many of the slowest-growing jobs are those that require just a high school degree, which accounted for more than a third of jobs last year. Notably, jobs that require no formal credential grow less slowly than those that require a high school degree.”
There’s some evidence for that proposition, though to put it charitably, it’s not overwhelming. The new statistics show that of the 15 types of jobs forecast to grow the most in percentage terms, only four are described as requiring the above credentials. In fact, of those growth occupations, the top six and eight of the top 15 supposedly won’t even require a bachelor’s degree, and five will be open to workers with only a high school diploma, the equivalent, or less. And seven of the top 15 will require completing four years of college.
But even the weak case for a big employment premium for the best educated relies entirely on the law of small numbers. The occupations falling into this category are there because they account for so few jobs; therefore, all else equal, big percentage gains are easy to generate. Take “physical therapists.” Those positions requiring a “doctoral or professional degree” will increase by 34 percent between 2014 and 2024, according to the Labor Department. That’s much faster than the projected 6.50 percent gain for all the job types studies. But it’s also a drop in the bucket compared with the nearly 9.80 million total new jobs the Labor Department believes the economy will create over that ten-year stretch.
The numbers of nurse-practitioners will grow even faster in percentage terms – 35.20 percent, according to the Labor Department. But that will translate into even fewer new workers in this category – 44,700. And the law of small numbers is still more apparent in the most lucrative of the fast-growing employment categories – physician assistants. These workers typically earned $95,820 in 2014, the Labor Department states. Their numbers will also rise by an impressive 30.40 percent. But those actual numbers will come to only 28,700 new physicians’ assistants.
Labor’s data on the 15 job categories with the greatest projected growth in absolute terms, for their part, illustrates the law of large numbers. Because these totals are so big to start with, big percentage moves are intrinsically tough to foster. But they’re clearly going to play a much greater role in influencing the job market’s nature going forward – especially from the standpoint of an individual gauging his odds of finding work. And these Labor Department figures go far toward debunking the idea of an American employment scene strongly tilted toward the highly educated.
In this group of 15 job categories, no less than eight will require “no formal educational credential.” And the Labor Department expects these eight categories to create nearly 21 percent of those nearly 9.8 million new positions we’ll be seeing in the U.S. economy over the next decade. Conversely, only two of those large-growth positions will require more than a bachelor’s degree – those medical assistant jobs, and nursing assistants. Together, however, they’ll be responsible for only 4.10 percent of the country’s new employment through 2024.
If you’re observant, moreover, you’ll notice that lots of these biggest job growers by either measure are in healthcare sector – which as I’ve repeatedly written, is counted by the government as part of the private sector, but that depends heavily on public sector spending for its vibrancy (and by extension, employment prospects). Indeed, nine of the 15 fastest job categories by percentage gain and five of the top 15 biggest in terms of absolute gains (including the top three) are in this massively taxpayer-subsidized portion of the economy. In other words, whether you’re highly educated or not, the Labor Department foresees that, if you’re working, you’re ever likelier to be working for the government.