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December 2006, Vol. 129, No. 12
Industry dynamics in the Washington, DC, area: has a second job core emerged?
Gerald Perrins and Diane Nilsen
Rapid job growth in several high-wage industries in the private sector, especially professional and business services, has made the Washington, DC metropolitan area,1 and above all Fairfax County, VA, a very attractive location for jobseekers. However, the Washington metropolitan area, and the District of Columbia2 in particular, have long been defined by the presence of the Federal Government. Despite the fact that Federal Government jobs have decreased and professional and business services jobs have increased over the 15-year span encompassing the first quarter of 1990 to the first quarter of 2005, these two industries have provided a foundation for high-wage jobs throughout the metropolitan area. Moreover, Fairfax County has emerged as the metropolitan area’s private-sector job leader,3 joining the District, with its concentration of public-sector employment, as a second major hub for regional economic activity. (See chart 1.)
The employment and wage data examined in this article come from the Quarterly Census of Employment and Wages (QCEW) program.4 This article compares shifts in employment from the first quarter of 1990 to the first quarter of 2005, by a variety of industry supersectors in the Washington, DC, area, one of the 12 largest metropolitan areas in the United States. Although this article focuses on employment and wage changes in the professional and business services and government supersectors, it also looks at industrial activity levels and commuting patterns to present a clearer picture of the industry dynamics driving the Washington economy.
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1 The Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area (MSA) is comprised of 22 counties: the District of Columbia; Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford, and Warren Counties, and Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park Cities in Virginia; Calvert, Charles, Frederick, Montgomery, and Prince George’s Counties in Maryland; and Jefferson County in West Virginia. Though the "county" designation in the MSA applies to the District of Columbia and the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas and Manassas Park, "jurisdiction" was often substituted, especially when referring to a mix of counties and cities.
2 The District of Columbia is designated a county in the Quarterly Census of Employment and Wages (QCEW) program, the foundation on which this article rests. The QCEW, a cooperative program involving the Bureau of Labor Statistics (BLS) and the various State Workforce Agencies (SWAs), provides employment and wage data for workers covered by State Unemployment Insurance (UI) laws that are compiled from quarterly contribution reports submitted to the SWAs by employers. For federal civilian workers covered by the Unemployment Compensation for Federal Employees (UCFE) program, employment and wage data are compiled from quarterly reports that are sent to the appropriate SWA by the specific federal agency. The employment and wage data used in this article are derived from microdata summaries of more than 8 million employer reports of employment and wages submitted by States to BLS. These reports are based on place of employment rather than place of residence.
3 The authors have defined three geographic categories in the Washington metropolitan area based on the following criteria: population, employment, and commuting patterns. The core, though generally defined as the urban central business district of a metropolitan area, in this case, the District of Columbia, has been expanded to include a second county——Fairfax County, VA—due to its increased population density, rapid job expansion, and influx of workers from outside the county over the 15-year time span; the suburban counties, or inner ring, contain seven large counties (Frederick County, MD; Montgomery County, MD; Prince George’s County, MD; Alexandria City, VA; Arlington County, VA; Loudoun County, VA; and Prince William County, VA), four independent cities (Fairfax City, VA; Falls Church City, VA; Manassas City, VA; and Manassas Park City, VA) surrounded by these counties, and the less populous Charles County, MD; and the exurban counties, or outer ring, contain the eight jurisdictions more on the periphery of the core areas (Calvert County, MD, Clarke County, VA.; Fauquier County, VA; Fredericksburg City, VA; Spotsylvania County, VA; Stafford County, VA; Warren County, VA; and Jefferson County, WV).
4 Under the North American Industry Classification System (NAICS), the industrial composition and organization of industries is defined by the type of activity, or sector, they are engaged in. For purposes of analysis, the Bureau of Labor Statistics has further aggregated NAICS sectors into groupings called "supersectors" of which there are 11: natural resources and mining; construction; manufacturing; trade, transportation, and utilities; information; financial activities; professional and business services; educational and health services; leisure and hospitality; other services; and government.
Quarterly Census of Employment and Wages
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