Floyd, Richard L.

Jones, Lonnie L.

Stebbins, Donald D.

English

Texas A&amp;M Repository

Employment Changes in Extension District 11:  1970-1974.

Texas A&M University

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L-1759
EMPLOYMENT CHANGES IN EXTENSION
DISTRICT 11: 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 11 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
*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,
growth. Districts with predominantly slow growth in-
dustries may be expected to have below average em-
ployment growth.
A second major reason for different employment
growth among districts is more rapid growth of a spe-
cific 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 of locational 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 11 consists of 16 counties on
the Upper Texas coast with a total population of
2,636,340 in 1970 (Table 1). The district contains
three SMSA's, Beaumont-Port Arthur-Orange in Jef-
ferson and Orange Counties, Galveston-Texas City in
Galveston County and Houston in Harris County.
The population in Orange, Galveston and Harris
Counties increased from 1960 to 1970 while Jefferson
County's population decreased slightly during the
decade (+ 17.9 in Orange, + 21. 0% in Galveston,
+40.1% in Harris and -0.4% in Jefferson). Ten of the
remaining thirteen counties experienced population
increases from 1960 to 1970 and the entire district
*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."
T
Table 1. District 11 Population and Employment by County
1970' Percent Population' 19702 Average Annual 19702
County Population Change 1960-1970 Employment Rate of Unemployment
Austin 13,831 0.4 6,400 3.0
Brazoria 108,312 42.1 41,925 3.2
Chambers 12,187 17.4 4,700 3.1
Colorado 17,638 -4.5 7,800 3.1
Fort Bend 52,314 29.1 18,750 3.1
Galveston 169,812 21.0 68,950 3.4
Hardin 29,996 21.8 10,630 5.1
Harris 1,741,912 40.1 749,600 3.3
Jackson 12,975 -7.6 5,005 2.1
Jefferson 244,773 -0.4 93,400 4.6
Liberty 33,014 4.5 11,450 4.2
Matagorda 27,913 8.4 11,100 3.7
Montgomery 49,479 84.4 17,900 3.0
Orange 71,170 17.9 25,270 5.2
Waller 14,285 18.3 4,825 4.5
Wharton 36,729 -3.7 15,575 3.3
District 11 2,636,340 30.3 1,093,280 3.5
Texas 11,196,730 16.9 4,548,455 3.7
'Bureau of Census: Number of Inhabitants - Texas, Table 9.
2Texas Employment Labor Force Estimates for Texas Counties, April 1970.
*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.
the growth rates shown in Table 2 can be considered
expected growth rates for the District. However, the
District 11 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
District 11. 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 11, the
number of jobs within the district would have ex-
Table 2. Texas Employment Growth Rates 1970-1974
population increased 30.3 percent during this period.
The overall unemployment rate for District 11 in 1970
was significantly less than state unemployment.
Employment Analysis for District 11
The employment data was provided by the Texas
Employment Commission and was recorded by em-
ployee's place of employment rather than residence.
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 11 with those throughout the state. If District 11
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 11 would have increased 29.8 percent. Thus,
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 11 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 1,918 2,323 -442 3,799
Mining 33,024 6,447 4,006 43,477
Contract Construction 78,086 29,388 30 107,504
Manufacturing 199,536 22,194 9,245 230,975
Transportation, Communication & Utilities 71,903 13,785 4,072 89,761
Wholesale & Retail 215,666 63,000 -3,517 275,149
Financial, Insurance & Real Estate 44,813 16,927 2,686 64,426
Services 101,763 85,386 3,359 190,507
Government 19,203 255 791 20,249
-- ---
---
Totals 765,912 239,705 20,230 1,025,847
**Rounding errors may effect row totals.
panded by 239,705 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 11 of 31.2 percent,
significantly above the Texas overall average rate of
29.8 percent (228,241 jobs). In absolute terms, the
district was expected to generate 11,464 more jobs by
having a favorable mix of industrial activities.
However, the district generated 259,935 new jobs
between 1970 and 1974 and actually grew at a rate of
33.9 percent rather than the expected 29.8 percent.
The reason for this difference is that seven of the nine
employment divisions located in the district outpaced
their counterparts throughout the state, especially
manufacturing. The net result of this apparent gain in
regionallocational advantage relative to other districts
was 20,230 more jobs than expected were generated
in District 11.
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 two employment divisions
which lag behind respective state growth. Unex-
pected employment increases realized in District 11
may be the result of deliberate or other management
decisions based on a number of factors including new
equipment, high labor productivity, geographic shifts
in markets and adequate 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 11 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 1,735 2,068 -323 3,480
Forestry 0 0 N/A 0
Fisheries 183 245 -109 319
Metal Mining 0 0 N/A 0
Oil and Gas Extraction 30,700 6,415 4,072 41,188
Nonmetal Mining except Fuel 2,324 29 -64 2,289
Contract Construction 78,086 29,388 30 107,504
Food and Kindred Products 15,966 556 -1,168 15,354
Textile, Apparel 2,224 344 -182 2,385
Wood Products 10,686 1,280 -1,093 10,873
Printing, Publishing 8,918 1,536 371 10,825
Chemicals and Allied Products 40,581 1,174 444 42,199
Petroleum, Coal Products 29,888 528 -215 30,202
Other Nondurable Manufacturing 9,313 2,585 519 12,417
Metal Products 33,553 6,948 1,960 42,460
Machinery Manufacturing 31,242 9,695 5,777 46,714
Transportation Equipment 9,199 -2,331 5,222 12,090
Instruments and Related Products 6,203 592 -3,380 3,416
Miscellaneous Manufacturing 1,763 703 -427 2,040
Railroad Transportation 0 0 N/A 0
Passenger Transit 2,313 -62 -254 1,997
Trucking, Warehousing 16,617 4,095 -200 20,511
Other Transportation 22,984 5,720 1,393 30,097
Pipeline Transportation 2,312 -257 -174 1,881
Communication 12,810 2,419 1,614 16,844
Utilities 14,867 2,206 1,358 18,431
Wholesale and Retail Trade 73,077 15,140 -2,090 86,127
Food Stores 23,991 6,902 923 31,816
Eating and Drinking Places 29,687 14,291 15 43,993
Retail Trade-General 88,911 25,637 -1,334 113,213
Financial, Insurance, Real Estate 44,813 16,927 2,686 64,426
Lodging Places 10,124 2,928 378 13,430
Personal Services 13,499 896 -22 14,373
Miscellaneous Business Services 26,102 16,700 1,119 43,921
Repair Services 8,190 4,336 -269 12,256
Health Services 16,977 31,294 4,997 53,268
Legal Services 2,043 3,014 -297 4,760
Educational Services 1,927 4,390 3,783 10,100
Entertainment 7,139 1,814 167 9,121
Nonprofit Organizations 2,779 7,939 -2,205 8,513
Private Household Services 0 0 N/A 0
Miscellaneous Services 12,983 8,796 -1,014 20,765
State Government 0 0 N/A 0
Local Government 0 0 N/A 0
Federal Government 19,203 255 791 20,249
Non-Classifiable 0 0 N/A 0
-- -- ---
765,912 237,135 22,800 1,025,847
**Rounding errors may effect row totals.
Educational programs conducted by the Texas Agricultural Extension Service serve people ofall ages regardless ofsocia-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


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Employment Changes in Extension District 11: 1970-1974.

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Employment Changes in Extension District 11: 1970-1974.

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