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The Changing Structure of the Washington Economy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The Washington area economy has undergone significant restructuring in recent years with
the historic domination of the government sector, which had accounted for 38 percent of
all employment in the metropolitan area just thirty years ago, declining to an estimated
22 percent in 1998. This decline has accelerated since 1993, as the federal government
implemented its nationwide program to reduce the size of the federal workforce. Since
July 1993, the area's federal work force has declined from 396,600 to 338,700 (9/98)
losing 57,900 jobs or 14.5 percent.
This dramatic change in the character of the area's employment has overshadowed a much more significant change. Over the past thirty years, total employment (inclusive of self- employed persons and small and recently established firms) in the Washington metropolitan area more than doubled, increasing from 1.5 to 3.2 million workers (see Table 1). During this period, the private sector generated 1.6 million new jobs, for a 175.6 percent increase, accounting for 95 percent of the region's total job gain. In contrast, total government employment, including military, grew by just 86,700 workers and the federal government, the area's largest employer, added just 9,800 new jobs representing a 2.8 percent gain over thirty years.
The Changing Employment Structure in the Washington Area* 1968-1998 (employment in thousands)
Key to the service sector's rapid expansion has been the growth of business services and
engineering and management services (see Table 2). Over the last five years (July 1993-
July 1998), these two subsectors generated 123,400 new wage and salary jobs (excluding
self-employed persons), for an increase of 36.7 percent. In 1993, jobs in these two
subsectors accounted for 15 percent of the area's total job base and have generated 36
percent of all new jobs over the past five years. This job growth accounted for almost
60 percent of the service sector's job gain over this period.
The Changing Employment Structure in the Washington Area* 1968-1998 (employment in thousands)
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