The 7 States Where White Collar Jobs Are Disappearing

24/7 Wall St.

by Douglas A. McIntyre, Charles B. Stockdale and Michael B. Sauter

The recession has driven home the fact that not all jobs are created equal. Blue-collar and minimum wage jobs, such as construction and retail, have been hit hard. Young people therefore have been more likely to lose jobs in the last three years. The same is true of minorities. Middle-aged people with higher-paying jobs, on the other hand, have fared better than most. Despite that, in some sections of the U.S., the number of white-collar workers as a percentage of the work force has dropped significantly.

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There is no single reason for the erosion of white-collar jobs in the seven states that 24/7 Wall St. identified as suffering from the trend. In Louisiana, for example, hundreds of thousands of people left the state after Katrina. Most came back, but white-collar workers did not return at the same rate as people with blue-collar jobs.

Some states probably had white-collar job erosion because of the shuttering of a few large companies. Missouri had the largest drop in white-collar jobs as a percentage of total jobs between 2000 and 2010. St. Louis was once headquarters to a number of Fortune 500 companies and was one of the largest cities in the central part of the country. It now ranks No. 57 among all cities based on population with barely 320,000 people. Large companies like McDonald Douglas and TWA are gone.

The last major reason that white-collar jobs as a percentage of the total have dropped in some of these seven states is that they are resource rich. Many of the people who have come to states like North Dakota and Alaska have probably not come to be managers. The growth in the number of people who work oil wells, mines and farm equipment has fueled the work force size in these states. States with crude and metals resources, as well as agricultural products, will likely continue that trend.

In order to identify the states in which white-collar jobs have decreased as a percent of the total workforce, 24/7 Wall St. reviewed data from the Bureau of Labor Statistics on the type of occupations people have in different states. Using accepted definitions of white and blue-collar jobs, we calculated the percent of the total workforce that was white collar in 2000 and in 2010. Some of the positions considered white collar include those in architecture, engineering, finance, management, and legal occupations. We then identified those states where the percent of the white-collar workforce had decreased. Across all states, only seven out of fifty actually had a relative decrease of white-collar positions, and only two of these actually had a net loss of those jobs. As a whole, the seven can fairly be characterized as states in which the proportional size of the white-collar workforce is shrinking.

1. Missouri
• Median Income: $46,005 (14th lowest)
• Change in Median Income: +23.9% (23rd smallest increase)
• Unemployment: 8.9% (20th highest)
• GDP (millions): $217,320 (22nd highest)
• Decrease in % of workforce that is White Collar: -8.14%

In 2010, Missouri lost the third most jobs in the country. Over the last decade, the state dropped more than 100,000 workers, and most of these were white-collar positions. The state lost upwards of 60,000 management positions and than 10,000 administrative support positions, which includes accountants, clerks and executive secretaries. Missouri's unemployment rate was one of the lowest in the country at the turn of the century, at less than 3%. To date, it has lost more jobs proportional to its total workforce than most others, and at 8.9% it has one of the highest unemployment rates in the country.

2. North Dakota
• Median Income: $45,140 (13th lowest)
• Change in Median Income: +31.3% (4th largest increase)
• Unemployment: 3.2% (lowest)
• GDP (millions): $31,254 (2nd lowest)
• Decrease in % of workforce that is White Collar: -4.76%

North Dakota is doing extremely well, economically speaking. The state has the lowest unemployment rate in the country, and according to numbers from the Bureau of Economic Analysis, the fastest growing economy by far. According to the U.S. Chamber of Commerce, the majority of jobs are created in the agriculture, energy, construction and manufacturing sectors. One of the driving forces of the state's economic growth is the development of oil fields currently taking place. This development requires a disproportionate number of blue-collar workers, increasing their percentage in the workforce compared to white-collar workers.

3. Alaska
• Median Income: $64,635 (6th highest)
• Change in Median Income: +22.2% (15th smallest increase)
• Unemployment: 7.4% (16th lowest)
• GDP (millions): $45,046 (7th lowest)
• Decrease in % of workforce that is White Collar: -0.71%

Alaska is rich in resources and has a small population. In 2000, two of Alaska's top ten largest private sector employers were in either the oil field services or oil and gas extraction business. By 2010, that number had increased to three, with many more in the top 100 biggest employers, according to numbers from the Alaska Department of Labor and Workforce Development. These companies employ blue-collar workers at a higher rate than white-collar workers, taking away from the total number of white-collar workers in the state as it compares to the general working population.

4. Texas
• Median Income: $48,199 (21st lowest)
• Change in Median Income: +22.3% (18th smallest increase)
• Unemployment: 8% (23rd lowest)
• GDP (millions): $1,106,236 (2nd highest)
• Decrease in % of workforce that is White Collar: -0.41%

From 2001 to 2010, the Lone Star State had an annual employment growth rate of 1.15%. Better still, since the end of the recession through April 2011, 37% of all jobs created in the U.S. have been created in Texas, according to the Dallas Federal Reserve. As an oil-rich state, this job growth has primarily been for blue-collar jobs, however. White-collar job growth has simply not kept up. Of the 818,000 jobs created between 2000 and 2010, less than half were white collar, causing the overall percentage of white-collar workers to decrease. Additionally, the state lost over 200,000 management jobs, and over 7,000 architecture and engineering occupations.

5. Montana
• Median Income: $43,089 (9th lowest)
• Change in Median Income: +30.2% (7th largest increase)
• Unemployment: 7.3% (14th lowest)
• GDP (millions): $31,809 (3rd lowest)
• Decrease in % of workforce that is White Collar: -0.38%

Montana had a net gain of nearly 45,000 jobs between 2000 and 2010, but only 19,000 of those jobs were white collar. Despite this general job growth, the state lost nearly 10,000 management positions. The state's job situation as a whole is quite healthy, with a relatively low unemployment rate. According to the Helena Independent Record, however, the state has a high rate of job turnover. Of the workers hired between August and September of 2010, less than 50% still had that job six months later.

6. New Mexico
• Median Income: $42,742 (7th lowest)
• Change in Median Income: +27.9% (14th largest increase)
• Unemployment: 6.9% (13th lowest)
• GDP (millions): $72,802 (14th lowest)
• Decrease in % of workforce that is White Collar: -0.15%

New Mexico has seen significant decreases in both legal and management occupations. Despite this, the overall unemployment rate is relatively low — 6.9% as of May 2011. This is down from 7.6% in April and 8.3% in May 2010. These numbers may be misleading, however. According to New Mexico Business Weekly, New Mexico has the lowest job growth rate in the country. Unemployment numbers are therefore dropping because people are giving up looking for work.

7. Louisiana
• Median Income: $42,167 (6th lowest)
• Change in Median Income: +36.7% (the largest increase)
• Unemployment: 8.2% (25th lowest)
• GDP (millions): $195,171 (24th highest)
• Decrease in % of workforce that is White Collar: -0.08%

Louisiana lost more than 40,000 white-collar management positions between 2000 and 2010. The state also had a net loss of more than 15,000 administrative assistants, which included bookkeepers, clerks and accountants. After Hurricane Katrina hit in 2005, well over 250,000 jobs were lost in the state. While most of the people who lost their jobs after the tragedy were rehired in the following months, the state retained a net loss of nearly 50,000 private sector positions.

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