Showing posts with label business model. Show all posts
Showing posts with label business model. Show all posts

Friday, July 3, 2020

Information industry jobs changes are mixed as economy re-opens from Covid-19

Three of the six information industries gained jobs in June and job losses slowed in the other three industries, according to preliminary labor department statistics.

Total employment in all six Information industries is still about 11 percent less than it was in February before stay home orders began. The six industries, which employed about 2.9 million people in February, had lost about 315,000 jobs by June.

However, the June jobs report is the first indication that some Information industries may be joining the recovery from the pandemic that began last month for sectors like Construction and Retail.

This post describes changes in employment for all six Information industries from June 2019-June 2020. The post does not include employment in selected occupations, which can be found in last month's post on Information jobs.

The first chart shows aggregate employment in all six industries.

The chart (above) shows monthly changes in Information sector employment. Data from the U.S. Bureau of Labor Statistics is seasonally adjusted to remove predictable influences such as seasonal changes or holiday hiring. This provides a more accurate estimate of changes from factors like the pandemic.

May and June employment statistics are preliminary and subject to revision.

The six Information industries employed more than 2.8 million people from June 2019-Feb. 2020. The industries lost jobs in March, April, and May before a small recovery in June.

June 2020 Information employment was still an estimated 315,000 jobs lower than in Feb. 2020, a decline of 10.9 percent. The Information sector employed an estimated 2.57 million people in June. 

Information is part of the private, nonfarm business sector which employed 129.7 million people in February 2020. The sector lost an estimated 21 million jobs in April, then added jobs in May and June. However, in June the sector was still down 13.1 million jobs since February, a decline of  10.2 percent.

Subsequent charts report employment in each of the six Information industries.

The second chart (above) shows employment in Data Processing, which includes hosting and providing data processing services.

Data Processing had the largest employment increase from May to June, adding an estimated 5,600 jobs. Employment is now 345,500, which is still below the 349,600 jobs in February.

Total job losses since February are estimated to be 4,100, a decrease of 1.2 percent.

The third chart (above) shows Motion Picture and Sound Recording, which includes the production and distribution of motion pictures and sound recordings.

This industry had the second largest employment gain from May to June, adding an estimated 2,600 jobs. However, employment was still far below the February figure of 456,000. 

Motion pictures and sound lost an estimated 243,700 jobs by June, or about 53.4 percent.

This unusually large decline may result from requirements that many people work in the same place when making a movie or a recording. Covid-19 makes physical proximity dangerous.

The fourth chart (above) shows Other Information Services, which includes search engines, internet-only publishing and broadcasting, and web sites that store and provide information.

This industry had the third largest employment gain from May to June, adding about 2,200 jobs.

Other Information jobs increased from February to March, before declining in April and May. Employment is still below the peak in March.

However, June's estimated employment figure is 1,200 higher than than the 354,400 jobs in February, an increase of 0.34 percent.

The fifth chart (above) shows Publishing, which includes newspapers, magazines, books, directories and software publishing. 

Job losses slowed in in June when the industry lost an estimated 600 jobs, the largest monthly loss in the Information sector.

Publishing had 770,000 jobs in February and lost an an estimated 30,700 jobs by June, a decrease of 3.9 percent.

The sixth chart (above) shows Telecommunications, which includes distribution and services for telephones, cable and satellite broadcasting, and internet access.

Employment losses in Telecommunications also slowed, an estimated decrease of 300 jobs in June was the second largest monthly loss in Information. 

The industry employed about 700,000 people in February. Telecommunications employment was down 12,400 June, an estimated decrease of 1.8 percent.

The seventh chart (above) shows Broadcasting, an industry that creates, acquires and distributes content via radio, television, cable and other subscription services.

Broadcasting employment decreased by an estimated 200 jobs in June, the smallest monthly loss in the Information sector.

The industry employed 263,300 people in February. Broadcasting lost an estimated 25,000 jobs by June, a decrease of 9.5 percent.


The pandemic continues to have the smallest effect on employment in Other Information Services, which may have two advantages. First, many employees can work from home. Second, there was increased demand for internet services as millions of people were ordered to stay home as much as possible. 

The June increase in Data Processing jobs is consistent with continued or increased demand for technology-based products and services. Job losses in Telecommunications continued in June, perhaps because the widespread loss of income during the pandemic reduced demand for telephone and cable services.

Motion Picture and Sound Recording remains the hardest hit industry despite the gain of 2,600 jobs in June. This change is too small to say if the large-scale production of movies, television programs and recordings is starting to resume.

Publishing and broadcasting job losses slowed, but these industries did not recover in June.

Tuesday, April 1, 2014

Some reasons digital media probably won't offset the decline in traditional journalism jobs

The long-term decline in journalism jobs appears quite serious because Internet-based firms don’t have a business model that can generate enough new jobs to replace the jobs that are being lost.

The Pew Research Center's Journalism Project recently weighed in on this issue, providing new information about the number of journalists employed at Internet firms. The data in the Pew report are limited, but they are in line with what we know about Internet business models.
Internet business models are not designed to support many jobs
The largest Internet firms – search engines and social media – use a micropayment system to generate small amounts of advertising revenue for each unit of production. Google makes pennies on each search result it delivers. Facebook and Twitter make a few dollars per year from each of their millions of members (these firms produce information about members that is used to target ads).
So Internet firms must keep their production costs low if they want to remain in business. These firms rely on automation – high speed computers and Internet connections – to deliver ads and information to their users. The firms also keep costs low with free access to the content that they index or display. Internet firms could not afford to pay for the content they need even if they wanted to.
Journalism firms that rely on Internet advertising revenue will have to charge the going rate, which means those firms must also rely on micropayments. So Internet-only journalism firms will probably only hire small numbers of journalists.
The Pew findings are in line with this expected outcome. Pew surveyed what it called 438 small digital news outlets focused on local coverage and found “an average of 4.4 jobs per outlet.”

The report also examined large digital organizations, some with national and international audiences, and the findings were striking. Only five of 29 large organizations[1] employ more than 100 journalists. Another six organizations employ 70 or 50 staffers, and the remaining 18 organizations employ fewer than 50 journalists.

Unfortunately, the Pew report did not include information about wages or the markets where the digital organizations operate. The report did not attempt even simple comparisons between digital and traditional media firms such as the number of journalists for a given audience size.
Comparisons would have been helpful because traditional media such as newspapers and television stations still employ the bulk of journalists in the U.S. Traditional firms don’t (yet) operate on a micropayment model. These firms still have substantial advertising or circulation revenue from their print and broadcast editions.
Some trends in markets for journalism jobs
So what are the current trends in jobs at traditional and digital media organizations?  A complete answer is beyond the scope of this post. However, I’ve examined trends for one important category of journalism jobs to illustrate how we might begin to answer these questions.
The category is employment of reporters and correspondents in the U.S. Reporters play a vital role by gathering raw information that is used to produce news stories. These statistics are from the Bureau of Labor Statistics, here and here,  and don’t include editors, photographers, or newsroom managers.

Bureau of Labor Statistics Reporters and Correspondents in the U.S.
Pct. Difference
Total employment
Nominal avg. wage
Inflation adjusted (2008)

The illustration begins in 2008, the year after the recession hit and advertising revenue at traditional media organizations went into a steep decline. The illustration ends six years later in 2013, when a sluggish recovery from the recession was well underway.
This first table shows the 2008 total of 50,960 reporters declined by 14.3 percent in those six years.  The average annual wage of $44,030 in 2008 increased by just $330 in those six years. I converted the 2013 wage to inflation-adjusted 2008 dollars, and the result shows that real wages actually declined by 6.8 percent.
Declining real wages are exactly what you would expect in a profession where employment is declining.
Reporters and Correspondents at Newspapers, Periodical, Book and Directory Publishers
Pct. Difference
Total employment
Nominal  avg. wage
Inflation adjusted (2008)

The second table shows the number of reporters working at newspapers, periodicals and other publishers. There was a 26.8 percent decline in the number of reporters in this category from 2008 to 2013. Nominal wages also declined by $320 a year. After adjusting for inflation, real wages declined by 8.3 percent.

Here again, a decline in real wages is expected because of the significant decline in the number of jobs. The decrease in jobs probably resulted from declines in newspaper and periodical circulation and advertising revenues.
Reporters and Correspondents in Radio & Television Broadcasting
Pct. Difference
Total employment
Nominal avg. wage
Inflation adjusted (2008)

This third table shows reporters working in radio and television broadcasting. There was a 7.2% increase in the number of reporters employed. However, the absolute increase was small – just 700 new jobs in six years – and did not result in an increased wages. Instead, real wages declined by 13.5%.

Why did wages for radio and television decline when the number of jobs increased?
One possibility is supply and demand.  We know, for example, that the supply of journalism graduates seeking television jobs far exceeds the demand.  Another possibility is that broadcasters adjusted to declines in ad revenue by laying off expensive older workers and hiring inexpensive younger workers to replace them.
However, there is not enough information in the table to be sure what the cause might be.
Reporters and Correspondents Other Information Services.
Pct. Difference
Total employment
Nominal avg. wage
Inflation adjusted (2008)

The fourth table shows reporters working for “Other Information Services.” This broad category with 242 occupations includes computer programmers and web developers. So this may include reporters working for digital firms.

Jobs in this category increased by 113% in six years. The percentage is high because the 2008 base of 1,830 jobs was small, and the actual increase is just 2,080 jobs.
Despite the rapid job growth, both nominal and real wages decreased dramatically from 2008 to 2012. Real wages declined from $71,200 a year to just $53,447 a year, a decrease of 24.9 percent.
The decrease in wages might be due to the small number of jobs in 2008. Perhaps these jobs were concentrated in high wage areas, and new jobs were added in less expensive areas.
Another possibility is that demand for these jobs is growing so fast it outstripped supply. The Pew report has anecdotal accounts of hundreds or thousands of applications for a single job at a digital firm.  If this is typical, it would drive wages down.
Again, the table doesn’t offer enough information to figure out the cause.

I think this illustration shows three important results.  First, almost all of the overall decline in reporting jobs is accounted for by one category - newspapers and other publishers.[2] Second, there is downward pressure on wages even in categories with minimal or strong job growth. Third, growth in the other information category still falls far short of replacing the jobs that are being lost.
Meanwhile, the Bureau of Labor Statistics projects continued declines in the number of reporters and correspondents, stating there will be 14 percent fewer jobs by 2022.

[1] I did not include one firm on the Pew list, Vice, because its staffing includes journalists and non-journalists. Vice has the largest staffing number, 1,100, which means job totals in the Pew report may have an upward bias.
[2] Two small reporter categories, each  with fewer than 700 jobs, were not included this analysis.