Floyd, Richard L.

Jones, Lonnie L.

Stebbins, Donald D.

English

Texas A&M University

L·1756
EMPLOYMENT CHANGES IN EXTENSION
DISTRICT 8: 1970-1974
Richard L. Floyd, Donald D. Stebbins, and Lonnie L. Jones*
Expansion of employment opportunities has long
been a goal of rural Texas communities. To reach this
goal, community leaders may find the abundant Texas
employment data useful for tracing changes in em-
ployment and for planning a variety of economic de-
velopment activities. The Texas Agricultural Experi-
ment Station and the Texas Agricultural Extension
Service have developed a series of reports which
utilize a shift-share analytical method and Texas em-
ployment data to trace changes in local employment.
This report provides the results of a shift-share
analysis of Extension District 8 employment com-
pared to statewide growth during 1970-74.
Shift-share analysis is essentially descriptive, but
yields more information than normal trend analysis by
identifying the contribution to district employment
changes made by the region's specific industry mix.
Hence, the analysis provides estimates of the district's
employment compared to other districts and the state
as a whole and indicates those industries for which the
region may have competitive advantages.
Reasons for Employment Growth
Differences Among Districts
Two major reasons explain why a district may
grow at a different rate than the entire state or other
regions within the state. First, a district is likely to
have a different mix of economic activity. If the dis-
trict is dominated by a variety of rapidly growing in-
dustries, it may have above average employment
growth. Districts with predominantly slow growth in-
dustries may be expected to have below average em-
ployment growth.
*Respectively, Extension economist-real estate, Area Exten-
sion resource development specialist, professor, Department
of Agricultural Economics. Texas Agricultural Experiment Sta-
tion, The Texas A&M University System.
A second major reason for different employment
growth among districts is more rapid growth of a
specific industrial activity. While an industrial activity
may experience statewide growth, decline or stagna-
tion, that same industrial activity within a given dis-
trict may manifest quite different local growth. For
example, an industrial activity may be slow growing
statewide but increase rapidly in a specific district
because oflocational advantages. Districts dominated
by a local, rapidly-growing industrial activity may be
expected to have an above-average employment
growth (and vice versa). *
The StUdy Area
Extension District 8 consists of 18 counties in
Central Texas with a total population of 499,147 in
1970 (Table 1). The district contains two SMSA's;
Killeen-Temple in Bell County and Waco in McLen-
nan County. The population in Bell County increased
from 1960 to 1970 while McLennan County's popula-
tion decreased during the decade (+32.3% in Bell
County and -1.7%' in McLennan County). Nine of
the remaining sixteen counties experienced popula-
tion increases from 1960 to 1970 and the entire dis-
trict population increased 10.8 percent during this
period. The overall unemployment rate for District 8
in 1970 did not differ significantly from state unem-
ployment.
Employment Analysis for District 8
The employment data was provided by the Texas
Employment Commission and was recorded by em-
ployee's place of employment rather than residence.
*Employment growth may not be reflected in rapidly growing
industries where productivity increases are accompanied by
declining employment such as agriculture. These industrial
activities are "capital-intensive."
Table 1. District 8 Population and Employment by County**
1970' Percent Population' 19702 Average Annual 19702
County Population Change 1960-1970 Employment Rate of Unemployment
Bell 124,483 32.3 33,295 3.3
Bosque 10,966 1.5 5,005 3.1
Brown 25,877 4.6 10,760 3.2
Burnet 11,420 23.3 4,355 1.8
Comanche 11,898 0.3 5,030 3.6
Coryell 35,311 47.4 7,580 3.6
Eastland 18,092 -7.3 7,350 5.2
Erath 18,141 11.7 7,560 4.4
Hamilton 7,198 -15.2 3,345 2.0
Hill 22,596 -4.5 8,910 2.9
Hood 6,368 17.0 2,760 3.2
Lampasas 9,323 -1.0 3,525 3.6
McLennan 147,553 -1.7 59,300 4.8
Mills 4,212 -5.7 1,770 1.7
Palo Pinto 28,962 41.2 9,850 2.6
San Saba 5,540 -13.2 2,205 2.0
Somervell 2,793 8.4 1,120 1.8
Stephens 8,414 -5.3 3,680 3.4
District 8 499,147 10.8 177,400 3.9
Texas 11,196,730 16.9 4,548,455 3.7
**Rounding errors may effect row totals.
Table 2. Texas Employment Growth Rates 1970-1974
*Includes only employees covered by the Texas Unemployment Com-
pensation Act. Agriculture, Forestry and Fisheries does not include
owner-operators and their families or hired farm workers.
District 8. These expected increases were computed
by multiplying 1970 reported employment levels in
the district by the Texas 1970-74 employment division
growth rates. Column 3 identifies growth resulting
from specific industries within the district and indi-
cates the difference between reported 1974 employ-
ment and the sum of reported 1970 employment and
the expected employment increases in each industrial
division.
Given the 1970 industrial mix in District 8, the
number of jobs within the district would have ex-
panded by 27,115 if every employment division had
grown at exactly the state average for that employ-
ment division. This would have resulted in an em-
ployment growth rate in District 8 of 29.4 percent,
slightly below the Texas overall average rate of 29.8
percent (27,439 jobs). In absolute terms, the district
Only employment covered by the Texas Unemploy-
ment Act was included. This excludes self-employed,
unpaid family workers, employees covered by the
Railroad Retirement Act and domestic service and
farm workers.
Since broad economic trends are of interest, an
analysis of the structure of the district's economy was
considered at the Standard Industrial Classification
Division level. Comparisons of the growth in the ag-
riculture, forestry and fisheries division should be
carefully reviewed because of the incomplete nature
of this data. Also, it should be noted that the govern-
ment division includes only federal employees.
Table 2 shows statewide employment growth rates
for each employment division for the 1970-74 period.
The agriculture, forestry and fisheries division and
the services division grew fastest during this period,
with rates of 121.9 percent and 83.9 percent respec-
tively. Overall, the average growth rate for the Texas
economy was 29.8 percent.
The growth rates shown in Table 2 provide a basis
for comparison of growth of industrial divisions in Dis-
trict 8 with those throughout the state. If District 8
had exactly the same industrial composition as Texas
and if each industry within the District had grown at
the same rate as it did within Texas, employment in
District 8 would have increased' 29.8 percent. Thus,
the growth rates shown in Table 2 can be considered
expected growth rates for the District. However, the
District 8 economy differed from the overall state
economy and growth rates deviated from the
statewide pattern during the 1970-74 period.
Column 2 of Table 3 shows the expected employ-
ment increase within each employment division for
Employment Division*
(One-Digit S.I.C.)
Agriculture, Forestry & Fisheries
Mining
Contract Construction
Manufacturing
Transportation, Communication & Utilities
Wholesale and Retail Trade
Finance, Insurance & Real Estate
Services
Government
Weighted Average
Growth Rate
1970-1974
121.9%
19.5%
36.6%
11.1 %
19.2%
29.2%
37.8%
83.9%
.0%
29.8%
Table 3. District 8 Employment Shifts 1970-1974**
(1 ) (2) (3) (4)
Employment
Expected Due to Specific
Employment Division Reported 1970 + Employment + Industry Growth Reported 1974
(One-Digit S.I.C.) Employment Increase Within District Employment
Agriculture, Forestry & Fisheries 82 99 71 252
Mining 842 164 154 1,160
Contract Construction 5,604 2,109 995 8,708
Manufacturing 25,429 2,829 -1,258 26,999
Transportation, Communication & Utilities 5,970 1,145 -5 7,110
Wholesale & Retail 26,074 7,617 607 34,298
Financial, Insurance & Real Estate 4,465 1,687 157 6,309
Services 13,505 11,331 -3,228 21,609
Government 10,108 134 78 10,320
--- -- -- ---
Totals 92,079 27,115 -2,429 116,765
**Rounding errors may effect row totals.
was expected to generate 324 fewer jobs by having an
unfavorable mix of industrial activities.
However, the district generated only 24,686 new
jobs between 1970 and 1974 and actually grew at a
rate of 26.8 percent rather than the expected 29.8
percent. The reason for this difference is that three of
the nine employment divisions located in the district
did not keep pace with their counterparts throughout
the state, especially services. The net result of this
apparent loss in regionallocational advantage relative
to other districts was 2,429 fewer jobs than expected
were generated in District 8.
Summary and Implications
Numerous factors determine location of industrial
activity; sources of raw materials, availability of labor
supply, nearness of product markets and transporta-
tion. Districts with a favorable industrial mix or a
local, rapidly growing industrial activity have a "com-
parative advantage" - a relative efficiency in the
production of these goods or services.
Shift-share analysis identifies employment
changes which result from the region's industrial mix
and specific industry growth within the district.
Causes of employment shifts are not identified. Fur-
ther research is needed to identify actual causes of
employment shifts in the three employment divisions
which lag behind respective state growth. Expected
employment increases not realized in District 8 may
be the result of deliberate or other management deci-
sions based on a number of factors including new
equipment, low labor productivity, geographic shifts
in markets and inadequate availability of finances.
Additional research should explore the reasons for
the district's industrial mix - why particular indus-
tries have located within the district. Also, the dis-
trict's ability to compete for new industry should be
examined. Of particular interest should be the ability
of local rapidly growing industries to maintain their
growth and the district's ability to further exploit its
comparative advantage in these industrial activities.
To enable the reader to explore the district's em-
ployment shifts in greater depth, a more detailed em-
ployment analysis has been developed and is pre-
sented in Table 4. * Analyses of employment shifts at
the county level are available. Contact your local
county Extension agent for further information.
*District totals may differ from those presented in Table 3 as a
result of disaggregation problems.
Table 4. District 8 Employment Shifts 1970-1974**
(1 ) (2) (3) (4)
Employment
Expected Due to Specific
Industrial Sector Reported 1970 + Employment + Industry Growth Reported 1974
(One-Digit S.I.C.) Employment Increase Within District Employment
Agriculture 82 97 72 252
Forestry 0 0 N/A 0
Fisheries 0 0 N/A 0
Metal Mining 0 0 N/A 0
Oil and Gas Extraction 601 126 82 809
Nonmetal Mining except Fuel 241 3 107 351
Contract Construction 5,604 2,109 995 8,708
Food and Kindred Products 3,046 106 -123 3,029
Textile, Apparel 5,355 827 -695 5,487
Wood Products 3,889 466 -576 3,779
Printing, Publishing 1,280 220 59 1,560
Chemicals and Allied Products 798 23 -51 770
Petroleum, Coal Products 4 0 -2 2
Other Nondurable Manufacturing 5,519 1,532 -340 6,711
Metal Products 661 137 304 1,102
Machinery Manufacturing 2,005 622 17 2,644
Transportation Equipment 2,405 -609 -251 1,545
Instruments and Related Products 25 2 16 43
Miscellaneous Manufacturing 442 177 -291 327
Railroad Transportation 0 0 N/A 0
Passenger Transit 458 -13 -20 426
Trucking, Warehousing 1,452 358 236 2,046
Other Transportation 181 45 19 245
Pipeline Transportation 5 -1 5 9
Communication 2,217 419 -79 2,557
Utilities 1,657 246 -76 1,827
Wholesale and Retail Trade 5,825 1,207 655 7,687
Food Stores 3,422 985 194 4,600
Eating and Drinking Places 4,699 2,262 -891 6,070
Retail Trade-General 12,128 3,497 361 15,941
Financial, Insurance, Real Estate 4,465 1,687 157 6,309
Lodging Places 1,200 347 -166 1,381
Personal Services 1,998 132 69 2,200
Miscellaneous Business Services 1,113 712 -88 1,737
Repair Services 618 327 -18 927
Health Services 4,100 7,558 -903 10,754
Legal Services 114 168 17 299
Educational Services 3,096 7,054 -8,536 1,614
Entertainment 686 174 -52 808
Nonprofit Organizations 246 702 470 1,419
Private Household Services 0 0 N/A 0
Miscellaneous Services 334 227 -90 470
State Government 0 0 N/A 0
Local Government 0 0 N/A 0
Federal Government 10,108 134 78 10,320
Non-Classifiable 0 0 N/A 0
-- -- ---
92,079 34,066 -9,379 116,765
**Rounding errors may effect row totals.
Educational programs conducted by the Texas Agricultural Extension Service serve people ofall ages regardless ofsocio-economic level, race,
color, sex, religion, or national origin.
Cooperative Extension Work in Agriculture and Home Economics, The Texas A&M University System and the United States Department of
Agriculture cooperating. Distributed in furtherance of the Acts of Congress of May 8, 1914, as amended, and June 30, 1914.
500-7-79 RD2


Employment Changes in Extension District 8:  1970-1974.

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Employment Changes in Extension District 8: 1970-1974.

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